The Lord Bishop of St Edmundsbury and Ipswich

John Hubert Richard, Lord Bishop of St Edmundsbury and Ipswich—Was (in the usual manner) introduced between the Lord Bishop of Bradford and the Lord Bishop of Portsmouth.

The Family

Lord Northbourne: asked Her Majesty's Government:
	In the context of their initiatives concerned with the family, how they define the word "family".

Lord Rooker: My Lords, families come in all shapes and sizes. However, support for children and parents is at the heart of the Government's initiatives to strengthen family life. Our primary aim is to ensure a good start in life for the next generation. That means ensuring stability for children and support for those who raise them.

Lord Northbourne: My Lords, I am most grateful to the noble Lord for that reply and most heartened by the way in which the Government put children at the very centre of their family policy. Does he agree, however, that using such a wide definition of the family risks eroding the network of responsibilities that parents owe to their children? I know that the Government take the view that they should not tell adults how to live their lives, but, in fact, the Government do, of course, tell adults how to live their lives when the matter reflects upon the welfare of children.
	Should not the Government be prepared to ensure that all parents and prospective parents know about the findings of recent research concerning the dangers of certain practices of parents? I have in mind, for example, excessive alcohol consumption during pregnancy, domestic violence or the abandonment of a child by one or both parents. Should not the Government be prepared to ensure that all parents know about the risks to their children?

Lord Rooker: My Lords, the noble Lord is absolutely right. Over the past few years, the Government have announced an enormous range of initiatives on family policy. Sometimes, they are directed at parents, but they also concern the role of grandparents in caring for children and the issue of financial support. Families are private affairs, but it is true that the Government will sometimes have responsibilities to parents. Sometimes, the concentration will be on mothers, sometimes it is on fathers, even if it is less up-front. We must not forget the role of fathers. We have projects for fathers around the country.
	I have read the extensive briefing provided for such a wide Question. In 1999-2000, following the introduction of the family support grant, there was a concentration on initiatives for fathers. The projects included Fathers Direct, Families need Fathers, Investing in Fathers and Making Fathers Matter. There is a Dads and Lads project and a Superdads project. I could go into greater detail; the definition of Superdads may not be what noble Lords might think. It is an extremely worthwhile project. We have tried to concentrate on various areas right across the family that may have been somewhat neglected.

The Lord Bishop of Bradford: My Lords, is the Minister aware that, in a city such as Bradford, which has people of many faiths, cultures and races, the word "family" means various things. For some, it can be a casual, almost temporary arrangement; for most people of religious faith, it implies permanence, commitment and dedication. Would it not be helpful for people in cities such as ours to know precisely what the Government mean when they use the word "family"? Will the Minister give us that definition today, or, if he cannot, will he tell us when he will?

Lord Rooker: My Lords, the reason why I answered the Question on behalf of the Home Office in the first place is that the Home Secretary chairs the Ministerial Sub-Committee on Active Communities and Family Issues. I am carrying around enormous definitions of families. Families, as I said in my Answer, come in all shapes and sizes, by and large.
	I have got some definitions of parents, who are one part of the family. They may not necessarily be the parents of the child; they could be people with parental responsibility. There are also definitions of parents for the purposes of education law in the Education Act 1996. Those definitions are different.
	We all want to see happy, tranquil, peaceful and private families, wherever they live and whatever their faith.

The Earl of Listowel: My Lords, the inroads that the Government are making into child poverty are welcome. Can the Minister say how the Government balance measures to encourage lone parents into work with allowing lone parents with children under the age of two to choose to stay at home and give the children their undivided attention, if they wish to?

Lord Rooker: My Lords, that is absolutely right for parents of children at that age. However, the Government have always taken the view that the best way out of poverty for any family is work. It is the role of government and society to facilitate work opportunities at a place and a time that is suitable to parents with caring responsibilities.
	That has been a problem in the past. People have decided that work was not available and that they were stuck on benefits. They wanted to work, not to be on benefits, but the hours and the location were wrong, and there was no help to look after a child—maybe the parent had no family or the neighbours were not that supportive. It is our job, through the host of projects that we have announced throughout the country in the past four years, to meet that desire. We are not forcing parents into work; it is simply that work is the best way out of poverty.

Lord Addington: My Lords, does the Minister agree that any definition of family to be used by the Government must reflect the reality in our society? The Civil Partnerships Bill, which will be brought forward by my noble friend Lord Lester of Herne Hill on Friday, would help with that.

Lord Rooker: My Lords, the Government have not taken a view on the Bill. Naturally, we will do so in due course. It is a formidable Bill and has obviously been drafted with considerable expertise and care on a very important area. There is a similar Bill in the other place. The Government announced in, I think, October or November that a unit in the Cabinet Office was considering the issue of civil partnerships. This country has probably been a little behind others in that regard.

Lord Rotherwick: My Lords, as a father of four, I should declare an interest. I do not know whether that makes me a dad or a superdad. Is the Minister aware that children are best nurtured in a family with a father and a mother? That being the case, what are the Government doing to ensure that children will, in the future, be brought up in traditional families with fathers and mothers?

Lord Rooker: My Lords, I detailed some of the projects that concentrate on fathers. That was a somewhat neglected area. It is clear that, in the main, children are best in a family. However, how that family is constructed and how it lives together are, essentially, matters for that family. We are concerned about the children, and children are best with two parents. However, sometimes, that may not be the case, for various reasons. Parenting skills must be developed as they have been long-forgotten by some. The safety of the child is of paramount importance—hence the range of projects—but we do not prejudge individual private circumstances.

Asylum Seekers: Illegal Entrants

Lord Campbell of Croy: asked Her Majesty's Government:
	What is now their policy on refugees seeking asylum in the United Kingdom who have arrived illegally in this country or are attempting to do so.

Lord Rooker: My Lords, the Government are committed to their international obligations under the 1951 United Nations convention relating to the status of refugees. All asylum applications are considered on their individual merits within the terms of the convention, regardless of whether the asylum applicant has entered or has attempted to enter the United Kingdom illegally.

Lord Campbell of Croy: My Lords, I am grateful to the noble Lord for that reply. Many refugees, once having arrived in France, try to enter the United Kingdom, as illustrated by the very large number who stormed the Channel Tunnel on Christmas Day. Is that because our system seldom ejects someone who has arrived on British soil? Furthermore, what progress is being made with regard to closing the camp at Sangatte?

Lord Rooker: My Lords, it is simply not true to say that we do not remove people. At the ports, some 40,000 people per year are turned back as they arrive. If someone claims asylum, then we look at the claim on its individual merits. Those who fail in an asylum claim are being removed at the present time at a rate of approximately 800 to 900 per month. We have a policy in place, training is being undertaken and resources are being allocated to raise that removal rate to some 2,500 per month, including dependants. So it is simply not true to say that we do not remove.
	With regard to Sangatte, discussions take place on a regular basis between Home Office Ministers—in particular the Home Secretary—and their French counterparts. Indeed, discussions were held only over the past few days which initially were quite badly reported in the media. Nevertheless, this is an issue, although the fact is that fewer people are coming through by clandestine means, hidden in lorries or ferries, or through the Channel Tunnel. That is now causing a problem for the French because the population of Sangatte is rising. Essentially that is a problem for the French Government and is one which they are actively seeking to address. However, as I have said before from this Dispatch Box, France is a safe country, a place that is perfectly safe in which people may claim asylum when they are fleeing persecution.

The Lord Bishop of Portsmouth: My Lords, while I appreciate what the Government are doing to address this difficult issue—for example, in the change of status for Her Majesty's Haslar detention centre—does the Minister agree that the original Question covering the articulation of a proper policy on immigration has to be addressed in the first instance?

Lord Rooker: My Lords, yes. That is to be done in an extensive and lengthy White Paper to be published in early February.

Lord Hylton: My Lords, the Minister referred to our international obligations. Of course that is correct, but is it sufficient? Do the Government appreciate that, over the past 13 months, no fewer than eight illegal entrants have been electrocuted inside the Channel Tunnel? In view of that, would it not be wise to consider joint screening in France to determine in which country applications for asylum should best be made?

Lord Rooker: My Lords, I have to say to the noble Lord that my response is no. All that would achieve would be to turn the Sangatte centre into a reception centre or clearing house for claims to enter the United Kingdom. That is the reality of what would happen. The suggestion is seductive, but it is a fact that tragedies are taking place both in the Channel Tunnel and elsewhere. Such acts are extremely dangerous. We have taken what steps we can to inform people staying in Sangatte of the dangers, even using a video produced last year to illustrate how dangerous is the practice of trying to jump on to moving trains, as well as making clear the other dangers implicit in what is taking place. I understand that such behaviour shows the degree of desperation felt, but using Sangatte as a clearing house would not solve the problem.

Lord Berkeley: My Lords, at an all-party meeting held last night, my noble friend said that 600,000 people came into this country illegally last year. Why can they not be turned back when they come into the country? My noble friend said that they can be turned back at the ports, but could they also be turned back at the mouth of the Channel Tunnel and thus sent straight back to the safe country of France?

Lord Rooker: My Lords, I should put it on the record that 600,000 people enter Europe illegally each year. The approximate rate of entry of asylum seekers to this country per year is 5,000 to 6,000 per month, a figure which has remained fairly static for a while. However, as I have said, it has been estimated that around 600,000 people enter the European Union illegally each year.
	I return to a point I made in response to an earlier question. I must stress that we return some people immediately, at the port and sometimes on the same aircraft that brought a person into the country. The rate at which such removals takes place is running at 30,000 to 40,000 per year. Not all those entering this country by such means go on to claim asylum, but if such entrants do claim asylum, we then fulfil our international obligations by judging each claim on its own merits. That means that it is impossible to remove someone immediately.

Lord Renton: My Lords, is the noble Lord aware that when the 1951 convention was agreed between many civilised countries, there were relatively few people who were considered likely to be refugees? However, since then, large numbers of refugees in various parts of the world are now being forced to leave their own countries for racial, political or religious reasons. Would it not be wise now to suggest that the convention should be renegotiated and revised?

Lord Rooker: My Lords, the noble Lord has made a good case. The situation today is not the same as it was 50 years ago when the convention was drawn up. We now have the phenomenon of internationally organised trafficking in human beings for economic purposes. Sometimes there is also a hint—it is only a hint—of mass exoduses from some countries being encouraged for political purposes; that is, in order to put pressure on other countries. International discussions are under way, but I have to tell the noble Lord that until the convention is changed we shall fulfil our international obligations under it. I say that because there are people who cannot claim protection under the 1951 convention, which relates to some of the issues raised in regard to the anti-terrorism Bill passed last year, so it is not a completely open door. That point should be put on the record.

Lord Dholakia: My Lords, can the Minister explain whether there are any legal means by which an individual can enter this country and claim asylum?

Lord Rooker: My Lords, I think that the short answer to the noble Lord's question is no.

Census Internet Site

Lord Avebury: asked Her Majesty's Government:
	When it will be possible to access the site www.census.pro.gov.uk to allow public access to the 1901 census details.

Baroness Scotland of Asthal: My Lords, the 1901 census Internet site went live on 2nd January. It was additional to the normal free microfiche service which was also released across the country. From 7th January, due to unprecedented demand, Internet access to the website was limited to users at the Family Record Centre and the Public Record Office, as well as at 150 libraries and service centres across the country. Qinetiq is now enhancing the website and the general Internet service will be restored incrementally on completion of the work.

Lord Avebury: My Lords, while I congratulate the PRO on its decision to make the 1901 census available online, and on the enhancements now being made to the website which will enable a larger number of users to access it, can the noble Baroness explain why the PRO did not accept the advice of the FRC consultative committee which, on 10th October last year, found that the PRO was underestimating demand for the website? Why did the PRO not take advice from the Mormons, who had a similar experience when their website went live in May 1999? Furthermore, can the noble Baroness tell the House how many users per day and how many hits per day will the website be able to cope with when finally it does go live?

Baroness Scotland of Asthal: My Lords, the PRO did take advice along the lines indicated by the noble Lord. We were aware of the experience of the Mormons. But noble Lords will know that, following its launch, the Mormon website, "FamilySearch", now experiences 7.4 million hits per day, which equates to 89,000 visitors or users per day. We scoped for 1 million users per day, rising to a peak of 1.2 million, which is the settled rate. That is a huge number of users. We did fully take into account the possible interest that might be generated by the website.
	The website should be able to deal with a user rate of 1.2 million per day. Noble Lords should also know that, when the website came online, the hit rate ran at 1.2 million per hour. No scoping exercise could have reasonably anticipated such a vast interest.

Baroness Crawley: My Lords, my noble friend on the Front Bench mentioned that, during the period while the website is not up and running, various venues across the country have been made available so that people can gain access to it. Can she detail where those venues are located? Furthermore, can my noble friend tell the House a little about how the website has been constructed? I had understood that the website was designed to be socially inclusive, rather than simply to address those known organisations and individuals with an interest in genealogy.

Baroness Scotland of Asthal: My Lords, my noble friend is right, the 1901 census site was intended to be socially inclusive—and it is. One of the delights of the site is that ordinary men and women—not only the historians and genealogists who normally use the site—have been able to have access. There is a growing fascination among all of us about our history. The people of this country and the diaspora—particularly our American cousins—are exploring the site with great energy. We celebrate that and are grateful for it. But we have had to manage it—and we are trying now to manage that interest. There is a free microfiche or microfilm service available across the country at local record sites and at the PRO office at Kew.
	As I said, the site has been scoped to deal with up to 1.2 million users and access is available at 150 sites across the country in libraries and service centres. We have them in Norfolk, Liverpool, Lincolnshire, Essex and Newcastle. There will be positions in Exeter, Dorset and Wiltshire. Our Welsh colleagues need not worry that we have forgotten them because Powys is coming soon.

Lord McNally: My Lords, given the interest in this subject, are there any plans to put earlier censuses on the site? There is an interest in genealogy and we might find that we have more blue blood in the House than is known.

Baroness Scotland of Asthal: My Lords, some people may be surprised by what they have in this House. There is a real interest in this subject. One of the joys of being able to do this is that we know that we have tapped into something which connects with ordinary people in the street. We carried out a scoping study in relation to an earlier census and it is likely, if we get sufficient money, that we will look at further and other matters for which we can provide a similar service. For instance, we know that there is a huge interest in relation to the First and Second World War records. I can assure the House that this is just the beginning.

Lord Brooke of Sutton Mandeville: My Lords, has the irony struck the Minister that, despite the Prime Minister's views on conservatism, the nation appears to have a considerable interest in its past?

Baroness Scotland of Asthal: My Lords, the House will know that my right honourable friend the Prime Minister has a considerable interest in this country's past. His government have evidenced that interest by the energetic and wonderful work that the Public Records Office is now undertaking and will continue to undertake. I can reassure the noble Lord that the Government love this country's history as much as any who sit in the House.

Lady Saltoun of Abernethy: My Lords, are there access sites to the website in Scotland?

Baroness Scotland of Asthal: My Lords, there are sites, but they are not run by the PRO. Your Lordships will know that the Public Records Office deals with matters in England and Wales. But I am sure that our Scottish cousins are as hungry for information as those south of the Border.

Lord Rotherwick: My Lords, can the Minister say when enhancement will be completed? Will there be an additional cost to the original tender for the enhancement?

Baroness Scotland of Asthal: My Lords, the technological and commercial risks involved are held by Qinetiq, the firm which is undertaking the enhancement. We hope that it will be completed as soon as reasonably practicable. Your Lordships will know that I hesitate to give a date because of the consequences the last time a date was mooted. It will come quickly—but I know it will not come quickly enough for some.

A-Levels: A* Grade

Baroness Sharp of Guildford: asked Her Majesty's Government:
	What proposals they have to introduce an A* grade for A-levels.

Baroness Ashton of Upholland: My Lords, Her Majesty's Government have no such proposals at present.

Baroness Sharp of Guildford: My Lords, I thank the Minister for that Answer and for the reassurance it gives that the DfES is running education policy and not No. 10. Nevertheless, does not the Minister feel that at present— with AS-levels still, to put it mildly, suffering from teething troubles and the proposed advanced extension award coming on stream next September—this area is already suffering from too many initiatives? Does the Minister agree that, with the proposals for the 14 to 19 agenda due at any moment, it is important to look forward to a school-leaving examination that comprehends both academic and vocational awards?

Baroness Ashton of Upholland: My Lords, I can assure the noble Baroness that it is, indeed, the DfES which is running education. I can state categorically that there is no truth whatever in a claim of any rift between No. 10 and the department. Far from that being the case, there has been a very constructive dialogue on our proposals for the future of A-levels.
	I agree that the 14 to 19 strategy will be an important part of how we develop the future for our young people. It may be useful if I spell out what will be covered in the consultation paper on the grounds of giving as much information as possible to Parliament. We shall be looking for the recognition of achievement in both academic and vocational subjects and considering an overarching award. We wish to create space in the curriculum to allow students to pursue their talents and aspirations. We wish to make high quality vocational options available to all students, to provide systematic, high quality advice and guidance and to remove existing barriers to collaboration. The reasons behind the proposals will be both social and economic.

Lord Taylor of Blackburn: My Lords, given the difficulties that we are now having with examinations, does not my noble friend feel that the time has come to scrap completely the British A-level and go over to the international baccalaureate?

Baroness Ashton of Upholland: My Lords, as I said, within the 14 to 19 strategy there will be many opportunities to look at the best way forward. Most noble Lords will feel that this will be of enormous value. I am happy to discuss in your Lordships' House problems within the education system in terms of examinations.

Lord Pilkington of Oxenford: My Lords, why does the English state have to have three examinations between 16 and 18 whereas in the whole of continental Europe they have examinations such as the Abitur and the baccalaureate at 18, and the system seems to work? Why is it that we have to examine our children so extensively?

Baroness Ashton of Upholland: My Lords, as I said, within the 14 to 19 strategy—which I look forward to discussing in your Lordships' House—there will be opportunities to look at these issues in detail. However, we know that the universities are finding the AS-level—which has settled down considerably—of value. Indeed, I understand that some universities in the Russell Group are starting to make unconditional offers to students on the basis of AS results. We also know that it is an opportunity for students who may not complete a course to attain some qualification. Inevitably there are pros and cons.

Lord Watson of Richmond: My Lords, does the Minister agree with the view expressed by Mr David Dunn, the head teacher at Yarm School who first blew the whistle on Edexcel and the lamentable performance of that company, that the real problem is that we have become the most over-examined country in Europe?

Baroness Ashton of Upholland: My Lords, as I said, part of the purpose behind the 14 to 19 strategy is to examine these issues. The noble Lord raised the issue of Edexcel. As noble Lords will be aware, my right honourable friend the Secretary of State for Education and Skills has asked the QCA to look at the issues surrounding Edexcel.

Baroness Miller of Hendon: My Lords, does not the introduction of the advanced extension award and the possible future introduction of an A*grade at A-level demonstrate that, at long last, the Government are admitting that the gold standard A-level has deteriorated and no longer has academic rigour?

Baroness Ashton of Upholland: My Lords, Professor Eva Baker, the chair of the independent panel which was set up by the QCA—who, as noble Lords may be aware, is the co-director of the US National Center for Research on Evaluation, Standards and Student Testing—said that students are performing better. This examination process is among the best in the world.

National Lottery (Amendment) Bill [HL]

Lord Walpole: My Lords, I beg to introduce a Bill to allow the National Lotteries Charities Board to make grants to endowment trusts as part of the endowment of such charitable organisations. I beg to move that this Bill be now read a first time.
	Moved, That the Bill be now read a first time.—(Lord Walpole.)
	On Question, Bill read a first time, and to be printed.

Greenham and Crookham Commons Bill

Lord Tordoff: My Lords, I beg to move that this Bill be now read a second time.
	Moved, That the Bill be now read a second time.—(The Chairman of Committees.)
	On Question, Bill read a second time, and committed to a Select Committee.

Business of the House: Debates this Day

Lord Williams of Mostyn: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the debates on the Motions in the names of the Lord Howe of Aberavon and the Baroness Knight of Collingtree set down for today shall each be limited to two-and-a-half hours.—(Lord Williams of Mostyn.)

On Question, Motion agreed to.

Constitution Committee

Lord Tordoff: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, on behalf of the Committee of Selection, That the Lord MacGregor of Pulham Market be appointed a member of the Select Committee in the place of the Viscount Cranborne.—(The Chairman of Committees.)

On Question, Motion agreed to.

European Union Committee

Lord Tordoff: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, on behalf of the Committee of Selection, That the Baroness Maddock be appointed a member of the Select Committee in the place of the Lord Wallace of Saltaire.—(The Chairman of Committees.)

On Question, Motion agreed to.

Tax Simplification

Lord Howe of Aberavon: rose to call attention to the case for simplifying the tax system; and to move for Papers.
	My Lords, the House will recognise that in raising the subject of taxation one is dealing with an anxiety as old as taxation itself, and one which is world-wide. As long ago as 1977, I had the honour of speaking about this problem to the Addington Society—a society devoted, curiously, to taxation. I described our tax system, even in those remote days, as,
	"incomprehensible, unrespected, unenforceable—and spinning like a top".
	Looking around the world, one discovers that we are by no means alone. Perhaps I may quote a comment from the United States, extracted from the San Diego Law Review:
	"If taxes had existed in the Garden of Eden, the Serpent wouldn't have needed an apple; the promise of a simpler tax system alone would have seduced Eve".
	One is indebted for that quotation to Professor Alice Abreu.
	The last thing I want to do in raising this topic is to be unfair to the present Chancellor of the Exchequer. Chancellors—if not a breed in danger of extinction—have to be treated with some care. However, he certainly cannot be said to have improved matters during his tenure of office.
	Perhaps I may quote from two newspaper cuttings. One is from the Financial Times published on 26th October 2000. The director-general of the British Chambers of Commerce, Mr Chris Humphries, said:
	"The Chancellor has failed to heed warnings from business that too much tinkering with the tax system can distort behaviour and raise compliance costs".
	On 6th December last year, under the headline,
	"Tax system's credibility continues to decline",
	Mr Robert Bruce, the well-respected former accountancy correspondent of The Times, wrote:
	"Anyone with an interest in tax simplification might just as well fold up their tents and melt away"—
	a curiously mixed metaphor. He attributed to the chairman of the Inland Revenue the following sentiment:
	"The Chancellor has made it clear that in this administration the priority is social change rather than simplification".
	So we can certainly invite the Chancellor to think again about some aspects of the matter.
	Perhaps I may summarise the problems as I see them. The first relates to the substance of the tax system, its quality, its simplicity, and the intelligibility of its structure. I refer not merely to the language or the law, but to policy, and not merely to existing tax policy and tax legislation but to newly emerging tax policy and legislation.
	Alongside that, I am anxious—as I am sure others are—about the sheer volume of tax legislation, both of existing material and that which continues to emerge, and particularly about the volume and frequency of change in the system. Hence one has to be concerned also with the process of preparing, consulting on, and enacting tax legislation and tax policy, existing and new. That is a matter for both Houses of Parliament, for government, and for people outside.
	First, the volume of tax legislation that comes forward and the way in which it is handled is not unrelated to the need that we have imposed on ourselves to enact such legislation through a very truncated parliamentary process, a limited window of time. That is for two reasons. First, the Parliament Act decrees in effect that there can be no consideration of fiscal legislation by this House; and consideration by the other place is very limited in quality, if not always in time. There is a growing volume of people saying that the performance of the financial Standing Committee in the other place has become, to quote Andrew Tyrie MP, "a pointless ritual", which achieves very little.
	The second inhibition on our timetable is the Provisional Collection of Taxes Act 1913. In the past, I have attributed responsibility for that to my countryman, the late David Lloyd George. That turns out to be a mistake. It was in fact due to the litigious activities of Mr Thomas Gibson Bowles against the Bank of England. I make that correction simply for the sake of history.
	The practical effect of the Provisional Collection of Taxes Act is that a finance Bill—all of it, however long it may be—which is normally published in April, must be on the statute book, complete and as it was then, by 5th August. So there is a very narrow window of time. We have allowed ourselves to operate under a "self-imposed and automatic guillotine". The extent to which finance Bills have grown in length, as Andrew Tyrie has said, has turned them into an "unstoppable juggernaut". This huge legislative vehicle churns through the other place in a very narrow time-scale, effectively without our even having a chance to salute it.
	The result has been an almost endless explosion in the volume of legislation passed. The present Chancellor, Gordon Brown—who is anything but a sloth—in five Budgets, has put on the statute book 1,796 pages—five Finance Acts. His peak achievement was 613 pages in the year 2000.
	I have to confess that during my own tenure at the Treasury I was not, by the then standards, particularly idle. I added some 766 pages to the statute book, with a peak achievement of 256. But I make a plea in mitigation. Mine were printed on Royal Octavo pages, which are much smaller than the A4 pages used by the Chancellor. There is a dispute about what it ought to be, but the conversion factor seems to be about 1.3. So the Chancellor's 1,796 pages turn out at 2,334 of mine. Comparing like with like, he has an annual average output of 467 pages, compared with my much more modest achievement of 153.
	I acknowledged one reason for that in my Hardman Lecture, which is published in the British Tax Review 2001; namely:
	"inspirational input from Chancellors who retain the misguided (and conceited) belief that tax changes can dramatically transform human behaviour".
	I have certainly learnt that that does not always happen. Some noble Lords will remember the business start-up scheme announced in one of my Budgets, and the business expansion scheme announced in the following year. They are now regarded as ineffective for their purpose and as rather unattractive beasts. Without being unduly critical of the Chancellor, I make the point that he has succumbed to this inspirational virus five times more frequently than I managed to do. This is a serious point. I cannot repeat too often the proposition that the sheer quantity of fiscal legislation is at least as important as the need for higher quality.
	What shall we do about it? Many people with whom I have been fortunate to have the privilege of working over some years have been—and still are—thinking hard about it. I pay tribute to all those involved in two particular fields. First, I pay tribute to those from the Institute for Fiscal Studies, in which I confess an interest as president of its Tax Law Review Committee. It has now established a working party, under the chairmanship of Sir Alan Budd, the successor as chief economic adviser to the Treasury of the noble Lord, Lord Burns. The membership of that working party includes my noble friend Lord Norton of Louth—I am sad that he is not here today—and the noble Lords, Lord Barnett and Lord Tomlinson.
	Secondly, I also pay tribute to those at the Inland Revenue—yes indeed, they are entitled to be praised—and at the Parliamentary Counsel Office, as well as all those from the private sector involved in the Tax Law Rewrite Project, the steering committee which I have the honour and burden of chairing. I also pay tribute to my colleagues on that committee and to all those on the consultative committee.
	I shall say no more about that now except that our progress, our plans and our method are well described in our annual reports. The fifth was produced in May last year and the next is due out later this spring. The first monument to our work is the Capital Allowances Act 2001. It will be the first of many.
	I have some lessons to draw from our experience. My central conclusion is that there is no chance of a knock-out success against tax complexity. There can be no big bang approach. Instead, we need to identify, define and establish not an event, but a process—a comprehensive mechanism through which the problems can be addressed and managed tenaciously over the years. It is a long-haul business. The continuing insistence of the process on simplicity must be as irremovable and as constantly present as the voice of the tax-raising departments and as the politically restless, impatient input of successive Chancellors of the Exchequer.
	My second proposition is that the Tax Law Rewrite Project is and must remain an important part of that process and a possible pointer to the future. It is worth noting three features of the project. First, although our work is proceeding more slowly than foreseen, it is widely regarded as successful and worth while. The distinguished vice-chairman of the consultative committee said:
	"the Capital Allowances Bill represents a revolution in accessibility. It has a logical structure and for the first time in my experience it has actually been designed to help the user".
	More importantly, perhaps, the Chancellor of the Exchequer has written more than one letter commending our work. His support for the project has been a huge encouragement, particularly as the project was launched by my learned—if I may so call him in this House—friend, Kenneth Clarke, during his time as Chancellor. It is great to be able to build on the foundations that he laid with the concurrence of all parties.
	I emphasise the narrow scope of the Tax Law Rewrite Project. Its remit is limited to improving the structure, intelligibility and user-friendliness of the existing law and to reproducing the existing code with only minor policy change. It does not consider further improvements. However, it is identifying and highlighting important areas in which a review of policy beyond our power seems necessary. We have identified three dozen topics in four of our response documents, some of which have already been taken up, such as the need to rewrite the PAYE regulations, which are wildly unintelligible. That is now taking place.
	My central proposal is that we should go beyond the Tax Law Rewrite Project and seek to establish alongside it a tax structure review programme based on the following features of the rewrite. We need to ensure that the neglected constituency of stability, as well as simplicity, is effectively represented at every level and every stage of the tax-making system. The Tax Law Rewrite Project is a purpose-built process, established with all-party support and committed to the completion of a clearly defined task. Its basic work is carried out not by a free-standing commission, detached from current policy developments, but by a dedicated team serviced by the Inland Revenue and thus, most usefully, plugged into the system. That team includes a changing cast of professionals from outside the Revenue. There is a comprehensive process of consultation drawn together through a widely representative consultative committee. The whole is overseen by the steering committee, which I chair and which includes senior figures from the judiciary, the tax professions, the business community and the other place.
	I close with three questions. First, is there broad support—as I very much hope—for something along the lines of the tax structure review project that I have described? Secondly, if there is—this is unexplored territory to a large extent—how should both Houses of Parliament be engaged at each stage of that process? Thirdly—a question for this House in particular to consider—do we see a role in that process for Members of this House, remembering that we already play a part in the enactment of tax law rewrite measures in a Joint Committee of both Houses and that, I venture to suggest, there is a body of expertise in this House, at least as it is at present constituted, whose talent is not drawn on for the scrutiny of tax legislation? The other place will be sensitive about that, but in an age when we are thinking the unthinkable it is worth thinking about that as well.
	I look forward in particular to the conclusions of the Budd working party and, of course, to the observations and advice that colleagues will offer this afternoon. I beg to move for Papers.

Lord Barnett: My Lords, I am delighted to have the opportunity to congratulate the noble and learned Lord, Lord Howe of Aberavon, not only on securing this debate and on his excellent speech, but on taking an interest in the detail of taxation and finance Bills. That is very rare in Chancellors, before, during or after they hold that post. I am bound to congratulate him again on that, because I know how much work he is doing on trying to simplify the tax system.
	I have read the noble and learned Lord's Hardman Memorial Lecture before and I looked it up again in preparation for the debate. His words are worth repeating. It is unclear whether he was referring to an American tax law professor or himself—although it does not matter, because his sentiments are the same—when he said:
	"Tax simplification is a hugely seductive subject. And headline-seductive as well".
	He could then have added that, having said that, nobody takes the blindest bit of notice. He went on:
	"Those words, from your latest Tax Manifesto, closely echo an earlier verdict: 'Incomprehensible, unrespected, unenforceable'".
	He continued later:
	"we are facing a problem not just of complexity but of volume too—of legislative overkill: too much law, too much change, and all too quickly".
	The noble and learned Lord referred to some aspects of that.
	The noble and learned Lord also spoke in that lecture not just of simplicity, but of simplicity and stability. I am not sure how both can be achieved. However, having quoted that particular tax lawyer, I am bound to say that the noble and learned Lord went on to ask whose fault it was that we have all this terrible stuff. He gave two reasons. First, he said, "I wasn't there, Guv!". Those were the words that he used. Secondly, he said that there were huge forces and powerful institutions all stacked against reform. He quoted the interesting comment, made in another context, by the noble Lord, Lord Hurd:
	"Inertia can develop its own momentum".
	That certainly applies to taxation.
	What now? The noble and learned Lord has referred to what he has done. He has already done so much on the Tax Law Rewrite Project and the Tax Law Reform Committee. I know that he is doing a very good job on that. I suppose that I should declare an interest as a member of a special working group chaired by Sir Alan Budd, as the noble and learned Lord told us. That group is composed of a lot of very good people—not including myself, I hasten to add.
	I suppose that I should also declare an interest in the field of taxation—which I did not do initially—as an accountant. However, as my noble friend Lord Peston always tells us that he is an emeritus professor of economics, knowing that that means that he is retired, perhaps I can say that I am an emeritus accountant.
	What will happen now? I am sure that there will be some excellent reports from the committees that the noble and learned Lord, Lord Howe, and Sir Alan Budd chair. The pressure for action has been tremendous. In his lecture, the noble and learned Lord referred to comments on our national culture made by the then Maurice Saatchi, the now noble Lord, Lord Saatchi. The noble Lord said that that culture,
	"stops political leaders taking the required action".
	Moreover, we cannot,
	"achieve true simplification with the political process as it stands; put bleakly, it carries no votes".
	From my experience some time ago of knocking on doors, I am sure that that is true. I do not recall anyone saying that what we desperately need and what will win votes is a reduction and simplification of tax law so that it is easier to understand. That is not what people were talking about at all. Nevertheless, it is important to understand from where the pressure for action, or inaction, is coming. Does it come from the government? As I said, most Chancellors are not madly concerned about simplicity—they are more concerned with raising taxation in myriad ways. However, I am sure that, even in those days, the noble and learned Lord, Lord Howe, would have addressed the issue very differently. I see him nodding.
	Does the pressure come from taxpayers? It is important to recall that only one-third of taxpayers fill in a tax return; the money is just taken from them. So those taxpayers are not very interested in the subject. As for those who do fill in forms, they use accountants and tax lawyers. I have already declared an interest on that subject. I should make it clear that, apart from the special members of the group set up by the noble and learned Lord, a majority of accountants and lawyers can and do understand the current laws, as complex as they are, sufficiently for them to simplify it in terms of the total tax that their clients pay. I am not sure that they are madly in a hurry to change the tax system too much, or to simplify it as we are discussing now. Nevertheless, it is important for us to understand that existing tax law creates a heavy compliance cost and a burden on the economy. That is undoubtedly true.
	So what then is the solution? Most major solutions are very party political in a whole variety of ways. A very simple way of simplifying the tax system would be to abolish income tax entirely, as has been suggested, and to use all indirect taxes. Most of us would disagree—certainly I would—with such a proposition as being grossly unfair. Equally, the noble Lord, Lord Saatchi, has suggested a flat tax. Equally, however, a flat tax is grossly unfair. That is certainly my view, although others—perhaps including the noble Lord—will disagree. However, as I have privately told the noble Lord, the political and party political approach to simplification is disastrous and will achieve nothing whatever. The only way in which we shall achieve simplification of the tax system is if all sides can agree on the proposition. That is what the reform committees established by the noble and learned Lord, Lord Howe, are seeking to do in a non-party political way.
	Ultimately, the only way in which there will be serious change is through Parliament itself. A man called Robert Maas has said that "Parliament is the key", and I am sure that that is true. However, if we are to have objective good sense in a parliamentary committee, whether it be a Select Committee or a Standing Committee, I hope that it will take advantage of the very great value that is available to it in the form of Members of your Lordships' House. In my experience on Select Committees, Members of this House tend to be much more objective in their examination of the issues—in a non-party political manner—than ever occurs in another place. One has only to look at the Select Committees that come out of another place to see their party political nature. That is inevitable as it is a party political House.
	If we are to have a true opportunity to amend and simplify the tax system, this House should be able to provide an input to some form of pre-legislative committee, without giving this House powers—which are not available to it now, and I am not suggesting that it should have them—to change the level of taxation. We are not talking about that, I hope, but discussing simplification of the system.
	Sadly, the party political problems to which I have referred affect all governments, not only the current one. All governments have had the same problem. The noble and learned Lord, Lord Howe, mentioned the size of Finance Bills. I have pleaded guilty in your Lordships' House before to having been responsible for putting many hundreds of pages of Finance Bills on the statute book. Regrettably, they were never properly scrutinised. When I was Chief Secretary, I had for a time a quite important Opposition Chief Secretary who is now the noble Baroness, Lady Thatcher. She and I never had debates on the detail of the Finance Bill; we discussed the major party political points. That happens all the time. The vast majority of Finance Bills are passed almost entirely unscrutinised.
	Consequently, the noble and learned Lord, Lord Howe, has referred to the size of Finance Bills. One of the reasons why Finance Bills are so big is that everyone is amending the previous Finance Bill and the Finance Bills before that. That is why they are so large. In his lecture, the noble and learned Lord claimed credit for something that he and the noble Lord, Lord Lawson, had done to remove some of the taxes that I helped to put on the statute book. He also said, however, that the number of pages removed from the statute book barely made a dent in it. He is quite right; that is what happens.
	Moreover, as the noble and learned Lord said, there are always Chancellors who want an opportunity to "play God", as he put it, by helping all kinds of individuals or businesses. He said that, in 1982, he put the business expansion scheme on to the statute book. He also said that he did so against advice, and that he has subsequently regretted it very much indeed. I can understand that, although certainly the desire was right and acceptance was good. He was trying to do something to help. In yesterday's Financial Times, someone suggested that we must have further help and tax concessions for childcare. Although we could all think of any number of possible tax concessions, very few of them will help to simplify the tax system.
	We can choose to help in many other ways. However, what are the prospects for the Tax Law Review Committee and the tax law rewrite committee to which the noble and learned Lord has referred and which he has done so much to establish? I have no doubt whatever that they will produce excellent reports. However, even if Parliament, as I hope—under our current leadership in your Lordships' House and in another place—changes some of the methods by which we consider Finance Bills, the fact remains that only modest changes will be made to future Finance Bills.
	I return to the comment made by the noble and learned Lord, Lord Howe, on simplicity and stability. As I said, I strongly support what he is trying to achieve. I am bound to say, however, that I remain sadly pessimistic that politics and the momentum of inertia, to paraphrase the noble Lord, Lord Hurd, will combine to prevent substantial improvement in simplifying our tax system.

Lord Goodhart: My Lords, I am pleased to be able to speak in this debate. I am a member of the Joint Select Committee on Tax Simplification, chaired by the noble and learned Lord, Lord Howe of Aberavon. It is an excellent Select Committee, particularly because it only meets at intervals of around two years when we have a new re-write Bill to consider. I am also a member of the Tax Law Review Committee, set up by the Institute of Fiscal Studies, to which the noble and learned Lord referred. That committee originally proposed the tax re-write project of which the noble and learned Lord is president.
	The re-write project resulted in the major re-write of legislation on capital allowances. The Capital Allowances Act 2001 improved drafting and put provisions into a more logical order. I look forward to the next stages of the re-write project. However, it is unrealistic to expect that we will ever get tax laws which are easily comprehensible to ordinary people. Our present laws are only comprehensible to the most highly specialised professionals and, frankly, not always to them. We need laws that can be understood at least by the smaller law and accountancy firms who do not charge their clients the kind of prices charged by City accountancy firms and specialised tax lawyers.
	The problem with tax is not just that it is expressed in complicated language, but also that it is often too complicated in concept. It is also complicated because it is too often used for purposes which are sometimes misguided or trivial, or which can be better achieved by other means. An example is the continuing effort to encourage enterprise by means of tax relief. The noble and learned Lord referred to the Business Expansion Scheme (BES, which I sometimes get muddled about and think of as the BSE scheme). He accepted some blame for that.
	The trouble with the scheme was that, within a couple of years, we ended up either with people throwing money at unviable schemes for the sake of the tax benefits they hoped to obtain, or they were using the scheme as a tax loophole by investing in things like property companies where no real element of risk was involved. Another example of something which became a tax loophole within a short period of time was the profit-related pay scheme.
	BES and profit-related pay have gone, and we have a change of government. But the present Government are still trying to create enterprise incentives through tax reliefs. Some tax reliefs, of course, are justified. But any proposal for tax relief needs to be looked at extremely cautiously. Tax reliefs complicate the tax system; they can often be abused; and they can redirect resources from more economically desirable purposes. That is something which has all too frequently happened. The aim overall should be a broad tax base and low rates of tax rather than high rates of tax alleviated by reliefs, which narrow the tax base.
	The present Government have made the complication of tax law, frankly, much worse. I should like to expand a little on what the noble and learned Lord said about the record of the present Chancellor of the Exchequer and the Government. The present Government have produced five Finance Acts which have achieved very little at enormous length. During this period there have been no changes of fundamental importance; for example, there has been nothing comparable to corporation tax and capital gains tax introduced by the Finance Act 1965; nothing comparable to the introduction of capital transfer tax in the Finance Act 1975; and nothing comparable to the introduction of self-assessment in the Finance Act 1994.
	I have been through the Finance Acts since 1997. We start with the Finance (No. 2) Act 1997, which was introduced shortly after the 1997 general election. Not surprisingly there is relatively little in it—a mere 53 sections, eight schedules and 109 pages in the Queen's printer's copy. By contrast, the 1998 Finance Act was a giant. It contained 166 sections, 27 schedules and 430 pages. Changes to enterprise investment schemes and venture capital trusts took up five sections and 34 pages of schedules.
	The 1998 Act also converted capital gains tax from a relatively simple and comprehensible concept—that of treating capital gains as income—into a completely incomprehensible and illogical system. In the Finance Act 1999 the Chancellor of the Exchequer paused to draw breath. That merely contained 140 sections, 20 schedules and 204 pages. We had only five sections and two brief schedules on enterprise incentives.
	Having drawn breath, in 2000 the Chancellor introduced an absolute monster containing 157 sections, 40 schedules and 613 pages. Enterprise incentives took up six sections and 94 pages of schedules. Among other things, that Act gave us the tonnage tax, something I had never come across before, which was introduced by a 50-page schedule.
	The Finance Act 2001 was still massive. It contained 111 sections, 33 schedules and 331 pages. Changes to rules on enterprise incentives, including some rules which had been introduced only the previous year, took up three sections and 30 pages of schedules. The aggregates levy, a new tax, took up 34 sections and seven schedules.
	There have been no fundamental changes of tax law during this period and, frankly, many changes were for the worse—for example, the revision of capital gains tax and, though this is less clear, the abolition of advanced corporation tax with the consequences that that had for pension funds.
	Also, of course, to some extent tax law expands because of anti-avoidance measures. Each loophole, under our normal scheme of tax law, is blocked up by subsequent specific anti-avoidance legislation. The result is tax legislation which is completely meaningless unless one understands the schemes which the provisions were intended to stop. I should like to see general anti-avoidance provisions incorporated into our tax law. I was unable to persuade the Tax Law Review Committee to recommend such a provision. The opposition mainly came from the accountants on the committee, the reason being (an understandable reason) that accountants and tax lawyers like to be able to give a definite answer when asked by their clients what the tax consequences are of any transaction or group of transactions which the clients wish to undertake. A general anti-avoidance provision creates a penumbra of uncertainty because it is bound to be in broad and general terms. I am all in favour of a degree of creative uncertainty when one is entering into arrangements to reduce tax.
	The Ramsey decision in the Appellate Committee of your Lordships' House in 1981—I will not go into what that decision meant but I can see a number of noble and learned Lords present who will be familiar with it—killed off the market for artificial avoidance schemes by creating a significant degree of uncertainty as to whether or not they would work. However, to some extent the Ramsey decision acts like an antibiotic. To start with it kills off almost all avoidance schemes; but a resistance develops. The Ramsey principle has been restricted by some subsequent decisions of the Appellate Committee with which I disagree. I have seen a powerful article written by the noble and learned Lord, Lord Templeman, attacking the way in which the Ramsey principle was weakened by subsequent decisions. It is now time for a new antibiotic, either in the form of a revival of the original Ramsey principles or, perhaps more realistically, by general anti-avoidance provisions.
	The law can and should be simplified. It needs to be simplified by drafting in plain language; by simplification of the concepts; by being very cautious about introducing tax reliefs; and by introducing general anti-avoidance provisions rather than blocking specific schemes with specific legislation. Unless we take steps to simplify our tax system, we will not end up with the status quo, but with tax law which gets ever more complex and much worse than it is now.

Lord MacGregor of Pulham Market: My Lords, I am delighted to speak briefly in the debate and to support most warmly all that my noble and learned friend Lord Howe said. I congratulate him on all that he is doing in this area. I also support all the comments bar two that have been made by the preceding speakers.
	Like two other noble Lords speaking in the debate I am a former Minister in the Treasury responsible for taking Finance Bills through the other place. I sat on the opposite side of the House to the noble Lord, Lord Barnett. We had many sometimes fruitful but certainly interesting exchanges as members of the Standing Committees on Finance Bills over many years.
	I do not want to repeat everything that has been said as I agree with so much of it. However, I slightly differ on two points made by the noble Lord, Lord Barnett. First, he was somewhat cynical about the possibilities of progress in this area. He may be being realistic, but I hope that that is not the case. I believe that all of us who feel strongly about the matter at least continue with our efforts in that regard. Secondly, he said that in his experience as a Member of the other place when he knocked on doors his constituents were not much concerned about the matter we are discussing. However, my experience as a Member of Parliament was rather different. Many of my constituents complained about the complexity of the tax system and about the burdens of tax. In the business world that was often one of the main topics of conversation when people realised that one was involved in these matters in the House of Commons. There is an important point here; namely, that the complexity of our present tax system constitutes a huge cost to the country and, I believe, to business.
	Of course, I well recognise that lawyers, both solicitors and barristers, and accountants are well remunerated as a result of the complexity of the system and the work they undertake advising clients on it. I sometimes used to think during debates in another place on these matters that it was somewhat ironic that we were involved in trying to make modest changes in the tax laws—the changes we recommended having gone through a long process and perhaps even through the courts at vast cost to everyone concerned—yet we were not so well remunerated for trying to make those changes.
	However, there is no doubt that there is a huge cost to business, and it is getting much worse. Like the preceding speakers, I am aware from my own experience of many of the reasons why that has come about. The two I single out in particular have already been mentioned. First, most Chancellors—here I disagree with the noble Lord, Lord Barnett—certainly on the Conservative side, have had the intention of simplifying the tax system and have perhaps started along those lines. However, the temptation to introduce new schemes to respond to particular pressures from pressure groups and to get an accolade for having tackled a particular political issue through the tax system is so great that inevitably they end up complicating the tax system further and probably doing more in that direction than in the direction of the simplification upon which they embarked in the first place. Secondly, all of us who have been involved in these matters know that even the tiniest tax recommendation has attached to it a huge bundle of papers from the Inland Revenue which analyse just about every aspect of the proposal: the cost, who will benefit and who will not, but, above all, the anti-avoidance measures. As the noble Lord, Lord Goodhart, said, I have no doubt that that is one of the main reasons why the tax system is so complicated.
	I pick up one of the examples given by the noble Lord, Lord Goodhart; namely, the aggregates levy in the Finance Bill 2000. When it was originally discussed, that seemed a fairly simple proposal put forward on environmental grounds and backed up by a number of lobbies. However, I was astonished to discover that that simple tax proposal occupied 74 pages of the Finance Bill 2000. That is an indication of the complexity of even a small proposal.
	I turn to the three main points I wish to make. First, I refer to the tax law rewrite and the Joint Committee on Tax Simplification. My noble and learned friend referred to that as fairly narrow in scope, but I believe that it is vitally important. He quoted the words of a tax specialist. Indeed, the Paymaster General on the Second Reading of the Capital Allowances Bill quoted at rather greater length the words of one of the leading figures in the tax world. I refer to the sentence the Paymaster General quoted, which my noble and learned friend did not, when she said:
	"I need to be able to find the legislation that is applicable, understand how it operates and advise my clients accordingly".—[Official Report, Commons, 15/1/01; col. 103.]
	Given the complexity the business world is now faced with on a wide range of issues, I believe that the work that was done on the Capital Allowances Bill, and which will be done on future Bills, is extremely important in that regard. When that Bill was debated in the other place—the setting up of the Joint Committee was debated on the same day—criticisms and concerns were raised and, indeed, some Members of Parliament voted against the measure on two grounds. First, they were concerned that it would be used as a method to introduce major changes in the tax system, for example, major changes in capital allowances. I believe that sufficient assurances were given at that time and were also built into the process to prevent that happening. Secondly, they were concerned that the measure looked like the first chink in breaking down the sole prerogative of the Commons as regards the tax system. On that point, I very much agree with my noble and learned friend. All of us who have experienced over the years the increasing pressures on Members of Parliament know well that there are few who can now take part in Finance Bill processes, partly because they do not have the expertise and partly simply because they do not have the time. Therefore, many of the vast clauses in Finance Bills do not receive the expert scrutiny that they should.
	Therefore, I believe that Members of this House have a role to play in these matters. Of course, we debated the roles and functions of this House only the other week when we debated the White Paper on House of Lords reform. As I say, I believe that those in this House with the relevant expertise have a role to play in these matters. Sometimes noble Lords can devote more time than MPs to the work of the Joint Committee on Tax Simplification and to the Bills I have mentioned.
	That brings me to my procedural point. I entirely agree with everything that my noble and learned friend Lord Howe said about the defects of the process of considering potential tax legislation. For the reason I have just given in relation to consolidation tax Bills, I believe that Members of this House should play a part in pre-legislative scrutiny. I believe that that would result in improved, better drafted legislation that is more user friendly, if I may put it that way. That is simply not the case at the moment with regard to the processes that we use for Finance Bills. I do not see how that would undermine the fundamental prerogative of the other place on tax measures as the actual policy would be voted upon and decided there.
	I take up the theme mentioned by the noble Lord, Lord Goodhart. Of course we must find ways to simplify existing tax legislation. That, for me, was always one of the attractions of tapering the capital gains tax system as that constituted a simple system that was easy to understand and operate. Of course, the Inland Revenue had many objections to that and we now have extremely complex, double banked capital gains tax legislation. The attempt to simplify it if anything, made it worse. There always ought to be an imperative to simplify.
	Perhaps the most important point is the one that both my noble and learned friend Lord Howe and the noble Lord, Lord Barnett, mentioned; that is, to avoid, wherever possible—this is where the political difficulty arises—the imposition of new taxes. I believe that schemes such as the working families' tax credit and the pension tax credit will hugely complicate the tax system and possibly not result in any great benefit. I do not want to make any party political point about that; I simply refer to the increasing complexity of the system.
	Many of the changes introduced by the present Chancellor, which appear small in themselves, have hugely added to the complexity of the tax system. Therefore, if we are to have a tax system that is simpler and more easily operated and understood, we must avoid—I know how difficult that is for political parties—the temptation constantly to tinker with the tax system in response to particular pressures. That brings me to the matter of self-assessment, which I have always strongly supported as a principle. I considered that as I supported it as a principle I ought to do my own self-assessment rather than use tax advisers. In any case there is a financial benefit in doing that, but it also enables me to understand the process. It strikes me that the self-assessment process has become much more complicated. It is rather like a crossword puzzle. I am not a crossword puzzle fiend myself but I understand that if one knows who has compiled the crossword, one arrives quicker at the correct answers. If one understands at the outset what the person drafting the tax guides is about, one begins to understand that the arrangements are not quite as complicated as they look. However, one has to know what the complexity of the tax was in the first place to understand why one went through a maze of different processes to get to the final page.
	This year—I give credit to the Inland Revenue for this—the straightforward tax calculation guide is much simpler and easier. However, the comprehensive tax calculation guide, in relation to which complexities arise, is just as complex as ever. The problem is that the more that one adds new changes to the tax system, the more complicated it becomes to operate the self-assessment system. Every little change seems to add another three pages to the calculation that one has to go through.
	Unless governments exercise self-restraint, I fear that the noble and learned Lord will be right and his cynicism will be realistic. However, I hope that, somehow or other, some of the processes that we are discussing today will help us to avoid that.

Lord Selsdon: My Lords, I hope that noble Lords will recognise how difficult it is for me, as a complete amateur in this subject, to follow a Chancellor—my noble and learned friend Lord Howe, who I greatly respect—two Chief Secretaries to the Treasury and the noble Lord, Lord Goodhart, who managed to confuse me even more with his references to confusing legislation.
	In my view, taxation is the most distorted instrument that man could have invented. Its original purpose, I understand, was to pay for wars. The Napoleonic Wars had a lot to do with it. The emotive words that are associated with taxation—subterfuge, camouflage and sabotage—were compounded by the word "confusion". I shall try to speak as a simpleton in a simplistic manner, by taking the matter back to the taxpayer, who needs some respect.
	For a period we felt that we were an overtaxed nation. As Professor Laffer used to point out, a nation that is totally taxed has no productivity and one with zero taxation suffers a breakdown in law and order. Somewhere between those two posts is the right amount of tax: the correct amount and the perceived amount.
	For whatever reason and however it was arrived at, we are, as a nation, fairly taxed. The problem is that we do not know how much we are taxed. Maybe people would be prepared to pay more tax. I begin by asking: what is the purpose of taxation? I understand that we are now in a service industry economy and that the Government are rapidly becoming a service industry that provides services to people, for which they pay by tax—if they pay tax.
	I wish to ask the Minister a few simple questions. There was a move by previous governments to create a friendly image for the inspector of taxes. He was depicted wearing a bowler hat and as a round, chubby character—he was probably derived from many of my former colleagues in Midland Bank. Now he—or she—has changed to a hermaphrodite green leprechaun figure who exhorts you in a strange voice to do things that you cannot understand. Many of us want to know whether the figure on television is played by an actor or an actress. It is, I gather, one of the most admired and hated advertisements of our time.
	The sort of question that people ask is, "Why do I have to pay income tax? Why can't I be paid a net amount?". For many years on the Continent of Europe, people would be able to tell you what their take-home pay was; that was their salary. They knew that tax was deducted. However, because we felt that we needed to be promoted a little more, we talked about our gross income, as if that, compared with our net income, made us far more important. The noble Lord, Lord Barnett, referred to the fact that one-third of people do not have to worry about completing tax forms because their tax is deducted at source. The more tax that can be deducted at source—the more that people can be given a net income—the better.
	There are three areas about which people wish to know. What proportion of their income tax goes on services? Those services can be counted on one hand, and the first is the health of the nation. Could the Minister give me some idea of what proportion of the cost of the health service will in future be met through tax and what proportion will be met through what one might call a strange form of off-balance-sheet funding, such as PFI, PPP or private-sector money? I ask the same question in relation to transport and possibly also education. We accept that law and order is a matter for government, as are foreign affairs and defence.
	I turn to the distortions to which the noble Lord, Lord Goodhart, referred, including that which involves giving money back and taking it away and giving it back again. When I was a full-time banker, we determined one day that two-thirds of all expenditure in the world was spent by governments and that we should therefore specialise in trying to get money back from governments. Governments were extremely willing in that regard because when things did not happen, they used to suggest throwing money back—they would create enterprise zones, give tax allowances and establish tax-based leasing operations for aircraft. Those highly complicated issues had the objective of stimulating the economy. Other countries did not do that to the same extent because it is "distortive" and causes problems in the medium to long term. I shall give noble Lords one or two examples involving relocation.
	If one gives people tax allowances and grants for relocating to a poor area, for a brief period there is regeneration and profitability but after that the distance from centres fails to enable one to attract the right labour force. Gradually, the area returns to being uncompetitive and there is decline.
	One of the worst things in this context occurs when governments introduce a new tax in good faith but fail adequately to collect the revenue. I come to our favourite subject these days—the European Union, the euro and the harmonisation of tax. We live in a common market in which there is the most extraordinarily uncommon method of taxation. There is an incredible amount of smuggling and arbitrage across frontiers as price differentials grow hour by hour and day by day.
	I turn to transport. As we know, we have the worst transport system in the EU and the most expensive cost per mile, and we are still loading on more taxes. The French suddenly decided not to have any more road tax—there is no road tax on vehicles. They worked out that whereas there was a differential tax—the higher the cubic capacity of an engine, the higher the consumption—they got as much money from petroleum tax as from car tax, which therefore disappeared.
	On the purchase of motor cars, it is impossible to understand why an Italian car could be cheaper in Spain or a Spanish car could be cheaper in France, or why all those instruments of transport are so differentially priced. Some people explain that by referring to taxation but others do so by referring to irresponsible profit.
	The most exciting tax of all, which created such emotion in earlier Budgets, was the penny on the price of the pint. The figures are amazing: 1 million pints every day cross the Channel into England from the Continent. That is equivalent to the total consumption of 6,000 rural pubs or £11,500 a year for every pub in the country. In 2000, the loss on alcohol tax was approximately £254 million through smuggling and £370 million through genuine purchases. It seems idiotic that the cost of a pack of beer in Calais is exactly the same as the alcohol tax and VAT applied in England. That form of trade will therefore continue.
	I shall not discuss cigarettes. In view of the other matters with which Customs and Excise has to deal, there is no revenue for government in grants, but there is much genuine revenue from alcohol. However, with binge drinking, the Government are caught between a rock and a hard place.
	On taxes that cause confusion, I turn to those involving VAT. I now have great admiration for VAT inspectors—they have been helpful and friendly but the difficulty is to contact them. As I have previously said in your Lordships' House, when one rings them, one has to press a number of buttons once one has got through. I was kindly told that they were in Newry and that if one does not press a button, one gets to speak to someone. Once one is able to speak to a person in the Inland Revenue or anywhere else—accountants advise that one never should—then one receives tremendous help and support. The information available from them is considerable.
	Let us turn to the attempts by government to generate new house construction and matters of that kind. A listed building in London in zero-rated. A new build—so long as two walls have been knocked down—is also zero-rated. However, if one puts one building together with another, the new building immediately becomes a listed building. Then, if one wishes to extend one's own house, one finds that the VAT rate is only 5 per cent. That causes tremendous complications. The application of the differential rates of VAT costs an enormous amount of money through seeking professional advice, and so on, and people ignore them. That same level of complication leads to many among our skilled labour force deciding that they no longer wish to run a business; they simply want their wages at the end of each week because the complications of administration start to bite and they lose business and opportunities.
	We could go on and on about all the differentials. With regard to certain taxes, if we were to ask the question, "What would happen if they went?", I believe that the answer would be most intriguing. If capital gains were to go, I do not believe that there would be any material loss. If stamp duty were to go, I do not believe that there would be any material loss in the long term. Perhaps the application of VAT should be standardised across Europe.
	In relation to the revenue of taxes applied to imports, in general we used to say that only 5 per cent of British imports were taxed. But it seems strange that we should have all these differentials. They are impossible to determine and one needs more and more advice on them.
	Speaking as a simple person, it would be so nice if there were a simple tax. In my view, the only way to achieve that is probably by tearing up all the pieces of paper that my noble friends and others have been talking about and, with a clean sheet of paper, asking, "What tax would you apply?". We would then debate it. The people of this nation are confused. They are willing to pay tax but they wish to know what they pay tax for. I believe that in general they feel that the overall level of tax in this country, if they could understand it, is fair.

Lord Peston: My Lords, I shall concentrate on the subject of income tax, although I say at the outset that, if I had my way, I would remove the VAT anomalies which exempt food, books, periodicals and children's clothes from tax. They are classic examples of political expediency taking precedence over rational policy-making. But they also remind us why sensible change in the tax field is so difficult and why we may well be wasting our time today. However, I echo the noble Lord, Lord MacGregor: the fact that we may well be wasting our time certainly will not stop us all carrying on in this field. I have spent my whole life advocating policies to no good effect whatever, but I still believe naively that one day something sensible that I suggest will happen.
	All Chancellors, and, a fortiori, shadow Chancellors, advocate tax reform and tax simplification. But inevitably they plead pressure of work and end up doing little or nothing. Perhaps I may remind your Lordships that nearly 20 years ago President Reagan introduced tax proposals in which the word "simplification" appeared in the title of the legislation. He enacted that legislation and it ended up as law. However, from all the studies that have been carried out since his efforts, it appears that the outcome is that the American tax system has not become any simpler or easier to understand. The most that one can say—although there is little evidence of it—is that without President Reagan's intervention the system might have become more complicated still. But even that is virtually impossible to substantiate.
	What are the criteria that we should use in looking at the tax system? In my judgment, the first and most obvious is equity. We need vertical equity; namely, it should be the case—I say with some regret that it no longer seems to be so strong in this country—that the richer one is, the more tax one should pay, and, in my view, disproportionately more tax. Equally—this is even more upsetting—we should have horizontal equity; namely, similar families with similar incomes should pay the same tax. In my judgment, nothing is more damaging both to the tax system and to our democracy than to read about immensely rich people who end up, one way or another, paying no tax whatever while the rest of us seem to pay maximum tax at all times.
	There is also the efficiency question, which has two parts. One is that we should not, unless we are forced to, use the tax system to distort the price mechanism. Occasionally there are good reasons why we should intervene, but those reasons must be set out. However, in my experience, most of them are unconvincing. The second aspect of the efficiency question is that we should go for taxes that are cheap to collect.
	That leads us to the simplicity question—what the Americans call "compliance costs". Those should be as low as possible and should certainly be weighed in the balance by Chancellors who seek to introduce new taxes. The first and obvious point has already been made. With regard to personal taxation, as few people as possible should have to fill out tax forms, and the Inland Revenue should calculate people's tax liability on the basis of reported information that it receives.
	Secondly, the compliance costs of those of us who do fill out the forms—I am one—should be as low as possible. Thirdly, I raise a point simply in order to echo what others have said. Everyone should be able to understand why his or her tax bill is what it is. With regard to business taxation, again, compliance costs should be low. Even though small businesses may have to use accountants on occasion, those accountants should not represent a significant part of their costs.
	With regard to compliance costs, I have seen figures indicating that 5 to 10 per cent of tax revenue relates to the cost of collecting the tax. That includes all the time and effort of individual taxpayers who have to fill out the forms. I have heard it said that compliance costs for businesses account for twice that amount. If true, that is an enormous sum.
	Of course, many of the compliance costs incurred by businesses arise because those businesses try to make use of all the tax avoidance measures introduced by well-meaning Chancellors. Those compliance costs could be avoided if Chancellors did not introduce such measures in the first place, even though, as noble Lords have pointed out, they were introduced for very good reasons. However, perhaps I may reiterate: are there not weighed in the balance the questions of complication arising from compliance and lack of simplicity? The fact that people are anxious to avoid paying more tax than they should leads, in many cases, to the question of whether far too many accountants are employed in this area. That is a subject to which I shall return.
	I believe that for the ordinary taxpayer the self-assessment form is, for the most part, not too difficult. Here, again, I believe that I agree with the noble Lord, Lord MacGregor. It is certainly not too difficult if a person has only one source of income. However, I am not sure—I have been trying to find out—what level of intelligence is required in order to fill out the form and whether that corresponds to average intelligence; that is, people with an IQ of 100, which seems to be the correct criterion.
	Wearing another of my hats—namely, my interest in education—I should certainly include the self-assessment form in the national curriculum. I believe that that would be far more valuable than many of the other things that go on in the national curriculum. It would be a test of both literacy and numeracy. However, less cynically, it brings out the point that, given what we know about the scale of illiteracy and innumeracy in our country, many of our fellow citizens could not conceivably fill out the form. It is worth reflecting on that matter.
	The main point is that if one has several sources of income or if one is entering the self-employment business, the form becomes more and more complicated, as the noble Lord, Lord MacGregor, pointed out. Perhaps I may give a personal example. My method of completing my tax form is always to keep the previous year's form. Nothing much changes in my life, and in the current year I simply fill out the form in exactly the same way as I did in the previous year. The only difference is that the numbers change, but all the boxes are filled in.
	However, this year I had the most horrifying experience. I received a letter from the tax man saying that my form had been rejected. That came as close to giving me a heart attack as any experience I have ever had in my life. I telephoned the department and asked, "What is going on here? Am I in serious trouble?". "No", they said, "there are several boxes you've left empty where you should have put in your net taxable income". I replied, "I have never put it in in previous years. Just the one box was enough". They said, "Things have changed. We now like it to be included in five other boxes". I said, "Don't you think that at least you might have told me?".
	That leads me to say that I consider the Inland Revenue to be outstanding in its willingness to help when one telephones its staff. But, of course, one has to telephone them; they do not reach out to you and say, "Can we tell you that nowadays the form has to be filled out slightly differently from how it was done before". It does not bother me because I can cope with these strains, but I imagine that for many of our citizens that would not be the case on receiving a letter from the Inland Revenue saying that their tax form was not acceptable.
	I revert to something I have just said. My main test of the tax system is precisely that it should not be a job creation mechanism for accountants. Given the Enron debacle, my view is—following the leader in the Financial Times and the very interesting article in today's Evening Standard—that accountants ought to concentrate on actual serious accounting. They ought to put their house in order, otherwise I believe that the days of self-regulation for them are over. Of course, that is not central to our debate today.
	I turn finally to the role of Parliament. It is naive to assume or expect that the Finance Bill is or could be properly scrutinised by the other place. It lacks the will, the time and certainly the expertise. At best, I find it very worrying from a democratic point of view that the contribution of Members on the Finance Bill relies heavily on inputs from a variety of interested parties and pressure groups. That is not the way to run the financial system of our country.
	In my judgment, as other noble Lords have said, your Lordships could do the job of scrutiny without in any way infringing the Parliament Act. But we are still not allowed to do so. If we are ever to have serious reform of your Lordships' House, certainly with a large number of elected or even 100 per cent elected Peers, our powers would have to be increased. All those who believe that one can achieve reform along those lines and not strengthen this House simply do not know what they are talking about. Indeed, I do not see the point of reform unless we give this House more power.
	Central to those powers is the right to scrutinise the Finance Bill and to ask for a rethink on certain parts which do not make sense and which are completely incomprehensible. That is not the same as saying that we would overturn the other place; quite the contrary. I regard it as fundamental that it should have the last say. But the fact that we do not have any practical say at all is both an inefficient and an absurd state of affairs.
	Therefore, to revert to my opening remarks and my own naivety, I hope that one day we shall have a bigger role to play ourselves and that we could and would use that role to achieve simplification.

Lord Brooke of Sutton Mandeville: My Lords, I am put to shame by my noble friend Lord MacGregor of Pulham Market and now by the noble Lord, Peston, in having to confess that I am a bear of very little brain who requires professional assistance in filling out my tax return.
	I join other noble Lords in paying tribute to my noble and learned friend Lord Howe of Aberavon for providing the opportunity to discuss the case for simplifying the tax system. One of the images that has lived in my mind over the past 20 years or so was the comment made by the Economist on my noble and learned friend's first budget in 1979. It described it as the opening stage of the ascent of a sheer cliff face. It likened itself, its readers and the nation at large, to skiers resting in the sunshine outside a restaurant in the Alps, drinking gluhwein or hot chocolate and said that occasionally one of us would raise our binoculars to the summit high above us, wait for the clouds to clear, and then for a moment espy the lonely and tiny figure of my noble and learned friend inching himself with awesome slowness up the sheer cliff face. On a day when in the Abbey we commemorate Lord Hailsham, himself an enthusiastic mountaineer, it is particularly good that long after darkness fell upon us in the Economist's imagined valley, my noble and learned friend, in the latest instance of his steadfast ascent, should still be clawing himself upwards on behalf of all of us and not least through the tax rewrite project.
	For 16 years, during which I spent more than three years abroad in the United States and Belgium before I entered the Commons in 1977, I was continuously responsible in my firm for meeting both payroll and profit targets. For two years between the by-election in the Two Cities when my noble friend Lord Tugendhat went to Brussels, I was both a Back-Bencher in the Commons and remained a part-time chairman and chief executive of my old firm, which by then operated in a dozen countries in Europe, the United States, Latin America and in the Pacific.
	During this latter phase, I well remember arguing, as a smallish businessman on the Commons Finance Bill committee in 1987, that we had to get away from a business climate where too many decisions were made for tax reasons to one where they were made predominantly for business and economic reasons. The noble Lord, Lord Barnett—it was a pleasure to listen to him today—and the noble Lord, Lord Sheldon, on behalf of the then government, will recall listening to such speeches long into summer nights that summer.
	I am genuinely proud of what, in the ensuing decade between 1979 and 1989 under my noble and learned friend Lord Howe and my noble friend Lord Lawson, we were able, despite occasional hiccups, to achieve in that regard. It must say something for our discharge of the Treasury in that decade that, besides my two noble friends the Chancellors, five of their Chief Secretaries and at least half-a-dozen of their junior Ministers, of whom I was lucky to be one, are now serving in this place. My only qualification, as I implied in my maiden speech, for serving in the Treasury was that among my seven Treasury colleagues overall, I was the only one who had never worked in the City. I am delighted that my noble friend Lord MacGregor of Pulham Market, whom I served during those years, contributed the speech that he did during the course of this debate.
	When my noble and learned friend Lord Howe was Chancellor, our noble friend Lord Cockfield made an excellent start in these matters on our behalf. There is a passage in a book about the teaching of classical languages where the author says—it echoes the Economist's metaphor— that the approach roads to the foothills of Parnassus are clogged up with the impedimenta of the Grammarian's Funeral. But my noble friend Lord Lawson was able to quicken the pace in the second half of the decade and that was in no small way due to the clearance by my noble friend Lord Cockfield of the impedimenta during the first half and the outcome was a significantly simplified system.
	I was away in Northern Ireland between 1989 and 1992 and I acknowledge that the landslide—to continue the language of the hills—back into tax complication did begin in those years and after when public expenditure pressures exercised themselves on successive and successor Chancellors and Chief Secretaries. I acknowledge, too, that however well the economy was doing in 1997, the public expenditure pressures had not yet fully eased. The new and present Chancellor had some alibi for having to follow his predecessors into raising taxes wherever he could. But urgent priorities of this sort, unless sensibly planned, have the hazard of "re-complicating" any tax regime because it is potentially and essentially haphazard.
	I suppose that the present Chancellor might defend his raid on ACT as a tax simplification, although I must remark on the wry irony that it continues to be defended as a way of discouraging dividends and encouraging investment, while the Government have not hesitated to continue to take notional dividends out of Consignia when the latter is crying out for investment. Much less defensible, however, is the plethora of penny packet incentive schemes in the great sweep of Treasury figures which the Chancellor tends to, under the equivalent of horticultural cloches. Knowing the Treasury, I am sure that it conducts audits of these schemes for their effectiveness, but they are classic examples of returning to the bad old days when businessmen took decisions first and foremost for tax reasons and they had the effect of overburdening the fiscal Christmas tree with excessive decoration.
	We know, of course, of the business experience of the former Paymaster General, Geoffrey Robinson MP, but the absence of others with business experience in the Treasury ministerial team since 1997 brings home another irony, that a Chancellor who, to his credit, is obsessive about the nation's productivity, himself erects road blocks to increased productivity both among businessmen and the professions by the multiplicity of schemes which also involve the Treasury in considerable micro-management. Ironically, this may even erode productivity within the Treasury itself. In the case of tax credits there is the further fear of what medical sources would call adverse side-effects in behaviour.
	In 12 minutes one cannot do justice to the totality of the subject. I acknowledge that the world is a complicated place and that in consequence taxation cannot avoid being complicated. Also the world is infinitely more global than when I gave up running my former firm in 1979. Indeed, now my old firm is a great deal more global than it was then.
	I further acknowledge that both globally and domestically the shadow of avoidance can stand over any tax system and oblige defensive counter-attack. But the benefits of tax rewrite can also be read across into examining basic concepts underlying large and familiar fiscal landmarks and territories. One of the few virtues of the appalling events of 11th September is to cause us to re-examine where we are. I may be being fanciful in calling in evidence and in aid Mr Kissinger's book on the Congress of Vienna, which was written while he was still an academic. In it he explains how Napoleon tore up the 18th century rulebook of Europe's ancien regime in diplomacy, in warfare and in statecraft, and then how, after Napoleon had been defeated, the Congress of Vienna, under Metternich as the strategic planner and Castlereagh as the political executant, gave stability back to Europe for almost the next 100 years. Incidentally, I commend the alliance between the strategist and the executant which might also be extended to an alliance between the two Houses of this Parliament.
	The analogy of Vienna may belong more to 11th September than to the tax system, but not the least virtue of this debate, stimulated and led by my noble and learned friend Lord Howe, has been to raise the question of whether a return to re-examining basic fiscal concepts is profoundly desirable in this increasingly global world. However, I agree that that is a larger subject than a two-and-a-half hour debate can resolve.

Lord Hodgson of Astley Abbotts: My Lords, I join with other noble Lords who have congratulated my noble and learned friend Lord Howe for initiating a debate on this important issue. My noble friend has given us an expert filleting of the strategic problem and some prescriptions for improvement. I do not propose to follow him down that route; it is territory that should be trodden only by former Chancellors of the Exchequer and former Treasury Ministers.
	I want to concentrate on the impact the tax system has on the practical, coalface end of our country and to consider the complexities, distortions and the administrative nightmare that the tax collection system now represents. I have gathered examples from my professional life around the country to give a worm's-eye view.
	On complexities, I am told that there are now 27 different rates at which income tax can be assessed. I cannot believe that the fiscal stability of the nation requires that many.
	On the PAYE system and the regulations referred to by my noble friend Lord Howe, each year employers have to purchase increasingly expensive software to administer their payrolls. In effect, as they point out, that is so that they can carry out the work of the Inland Revenue for the Inland Revenue. The burden falls heavily on small and medium-sized companies. The working families' tax credit, the children's tax credit and the student loan repayment programme are no doubt all worthy objectives in themselves but they are extremely complicated to administer.
	On my next point I follow my noble friend Lord MacGregor. Where the tax system interfaces—I use the word "interfaces" advisedly as the tax system is not integrated but interfaced—with the social security system, the complexities are compounded. I invite those noble Lords who fear that I may be exaggerating to join me tomorrow afternoon for the Committee stage of the State Pension Credit Bill. Your Lordships will find it an exhilarating and an exciting occasion, but I would advise them to bring a cold towel.
	On the transfer of companies, there is a further difficulty. For a number of months after the transfer of an undertaking, incorrect amounts are deducted or paid by the new employer because of delays in acquiring the appropriate reference numbers. The noble Lord, Lord Barnett, said that that was not an issue that much affected people in the street. When people find that wrong deductions are made, they become pretty excited. Those are some of the complexities.
	On distortions, on capital taxes we have already heard reference to the effects of taper relief. But the result has been to ensure that enormously wealthy people pay capital gains tax at the rate of 10 per cent, while ordinary individuals who have scrimped and saved during their working lives and who have built up a modest portfolio of direct investments in, say, Marks & Spencer, Unilever or GlaxoSmithKline have to pay capital gains tax at 40 per cent. As the noble Lord, Lord Peston, pointed out, where is the equity in that?
	Another point on structure is that the continued imposition of stamp duty on the purchase and sale of shares has caused the emergence of a whole new industry within the City, that of "contracts for difference", the operation of which avoids the payment of stamp duty. Now it accounts for about 20 per cent of the exchange of shares in the United Kingdom and is accounting for a rapidly rising proportion. If, in reply to the debate, the Minister says that such a tax is important and that the yield of £3 million to £4 million cannot be put aside, perhaps he will reassure the House that he has checked with his officials that there is not a falling yield as "contracts for difference" begin to have a more important impact. During this period, while the City struggles to maintain its supremacy and take the leadership of the European common financial market, that tax creates a severe competitive disadvantage.
	Lastly, I refer to the administrative problems of self-assessment. It has become extremely complicated. The noble Lord, Lord Goodhart, said that ordinary people could not hope to understand the tax law. If we are to have self-assessment, people must be able to understand it. Otherwise, why have self-assessment?
	I supported the original ambitions for the self-assessment scheme which were a bargain—a bargain between the Government and the taxpayers that there should be a simple system that would save hours of time for taxpayers and for the Inland Revenue and that would improve the Government's cashflow by setting deadlines for tax payments. However, the Government have progressively reneged on their side of the bargain by allowing or encouraging creeping complexity. Interestingly, the Inland Revenue website says that most of the forms are not suitable for download—I shall let that pass. The personal tax return is eight pages of closely-packed type, which is probably fair enough as a personal tax return. But the tax calculation guide has 15 pages, with 134 boxes that have to be filled in. The noble Lord, Lord Peston, referred to that form. I invite him to consider page 15 in the student loan repayment section; it is very complicated indeed. At the front of the form one sees that if one has any of the following kinds of income,
	"scrip dividends . . . gains on UK life policies . . . share schemes . . . partnership, foreign, trusts . . . capital gains",
	that form is not good enough and one has to fill in another form.
	In the past noble Lords opposite have tried to explain that away by saying that self-assessment was the idea of a Conservative government. I am prepared to own up to that. It is a splendid idea. It is the implementation that is faulty, not the original principle. It is also argued that the Inland Revenue will fill in the form if it is sent in by 30th September. Some people cannot send in their forms by that date, particularly if they have foreign income. But why do we have a self-assessment system if it is so complicated that one has to send in the forms to the Inland Revenue to be filled in? On both those grounds, I believe that we need to find a new way of dealing with this section of the tax code.
	As the Inland Revenue would say, the result is that each year self-assessment forms are being sent in later and later as individual taxpayers, for perfectly obvious reasons, face the hassle of filling them in.
	I believe that everyone in the country—voter, humble taxpayer, or complex taxpayer—would agree that the time has come to call a halt. The tax system is arbitrary, inequitable and unfair. It is complex beyond the comprehension of the layman. As the noble Lord, Lord Barnett, pointed out, it is a huge waste of public and private resource. In my view, it is corrosive of public trust and confidence. My noble and learned friend has performed a great service by arranging today's debate. I hope that the Government will at last take notice and act on his proposals.

Lord Brightman: My Lords, with your Lordships' permission, I should like to say just a few words during the gap. The case for simplifying the tax system is not new. In the course of researches, which I recently made in another area, I came across a pearl that I felt might be appropriate to the present occasion. The year was 1928; the case was Sutcliffe v Commissioners of Inland Revenue; and the judge was Mr Justice Rowlatt who, when referring to the Finance Act 1927, said:
	"Section 21 . . . is made perfectly unintelligible to any layman or any lawyer who has not made a prolonged study with all his law books at his elbow . . . it is a crying scandal that legislation by which the subject is taxed should appear in the Statute Book in that utterly unintelligible form. I am told, and rightly told, by the Attorney-General—he understands it as much as anybody—that it is only in this form that legislation can be carried through at all. Then all I have to say is that the price of getting this legislation through is that the people of this country are taxed by laws which they cannot possibly understand".

Lord Newby: My Lords, I join other noble Lords in thanking the noble and learned Lord, Lord Howe of Aberavon, for introducing this debate. I believe that there is a considerable degree of agreement among all those who have spoken today. Among other things, everyone agrees that the tax system is increasingly complex and everyone agrees that tax legislation is extremely voluminous.
	Most people seem to agree that there has been too much change, but why is this the case? A number of arguments have been put forward to explain why this happens both in this country and elsewhere. One explanation that has strength in my view is simply the annual Finance Bill conveyor belt. Every year, this juggernaut—if you can have a conveyor belt that is a juggernaut—within the Revenue departments and the Treasury starts the minute that the Finance Bill of the previous year passes into law.
	I cannot claim to have had the same effect on the tax system as either the noble and learned Lord, Lord Howe of Aberavon, or the noble Lord, Lord Lawson, who I see is now in his place. However, in the summer of 1980 when working as a junior tax official in Customs and Excise, we were asked to put forward what were known as "minor starters" for the Finance Bill of the following year. In order to prove that I had not gone to sleep, I suggested that, by extending car tax to motorbikes, it would be possible at one and the same time to increase revenue marginally and hit a product that was almost exclusively imported, thereby benefiting the balance of payments. Such was the strength and energy that I put into the proposal that it was in fact incorporated into the following year's Finance Bill. It was a minor addition and complexity to the tax system; and, like many of the other broader additions and complexities to the tax system that have been discussed this afternoon, I suspect that it brought forward no benefit.
	A second argument and reason for the tax system becoming more complicated was the one referred to by the noble and learned Lord, Lord Howe; namely, the way in which Chancellors of the Exchequer, especially this Chancellor, have seen taxation as the means of social change. I do not mean the old-fashioned use of taxation as a way of social change by redistributing tax in a relatively simplistic way by having income tax as one of the main sources of tax, but a whole raft of extremely complicated, theoretically targeted measures that affect small groups of society—or sometimes large groups—and which, if effected, would bring about some degree of social change. However, there is a problem with that approach. As a number of noble Lords have said, when one makes that kind of change it does not often have the desired effect.
	When dealing with the business side, the noble and learned Lord, Lord Howe of Aberavon, referred to the Business Expansion Scheme and the fact that it did not achieve the desired aim. Even if it had been successful in that respect, it would still have been unsuccessful in that it generated a whole new industry of tax avoidance. The noble Lord, Lord Hodgson, and my noble friend Lord Goodhart also referred to the complexities of the tax system, which have either been counter-productive or have imposed unnecessary and unacceptable burdens on people. Moreover, not only do many of these tax changes not work, they also impose major costs. As taxes are being collected at present, there is no measure as to what the cost is likely to be compared to the benefit gained.
	Should we despair of ever making any significant inroad into the tax system and its complexity? The most important comment here beyond that made by the noble and learned Lord, Lord Howe, in describing his work, was made by the noble Lord, Lord Brooke. He outlined how the noble Lords, Lord Cockfield and Lord Lawson, were able to make substantial inroads into the complexity of the tax system by having the political will and determination to do so. Therefore, I am inclined to believe that we should go forward on the basis that change can be made—simplification can take place—but that, equally, as a number of speakers have said, it is a process not a big bang.
	I should like to devote the rest of my speech to two of the questions raised by the noble and learned Lord, Lord Howe. First, how should both Houses of Parliament be involved? Secondly, what, in particular, should be the role of this House? There are two issues that we must consider. To begin with, we should seek to stop further unnecessary complication of the tax system, and then we should consider how we might simplify what already exists. Complication occurs almost effortlessly because there is no proper scrutiny by Parliament of the detail of many tax changes. Therefore, we must look to see how Parliament can stop that from occurring, and do so to a greater extent than is the case at present.
	There are a number of ways that we might consider, many of which would require the involvement of this House in some measure. I agree with the noble Lord, Lord Peston. If we do move to the next stage of reform of this House, many of the arguments of another place about whether it is legitimate for people here even to look at tax legislation will diminish. As long as people accept that there is no fundamental challenge to the Commons in terms of tax rates and structures, there can be no argument in principle as to why this place cannot play a bigger role in such matters. But how should this House do so?
	First, pre-legislative scrutiny of new taxation proposals is an extremely good way of beginning to tease out the problems that might occur. Let us take, for example, the Business Expansion Scheme. If that had been subject to pre-legislative scrutiny, the problems that have been flagged up by Inland Revenue officials would have become clearer at an earlier stage and that might have persuaded even the noble and learned Lord, Lord Howe, to think again; or, indeed, to bring it forward in a different way. Secondly, I strongly believe that we should split the Finance Bill into a "proper" Finance Bill, as it were, and a tax management Bill. The tax management Bill should be considered as every other Bill is—by this House as well as by the Commons.
	There are a number of arguments as to why that may not be a good idea. But, having looked at them, they can be answered. The principal one, which is a kind of clerks' and officials' argument, is that it simply cannot be done and that every tax measure—every clause in every Finance Bill—affects the rate of taxation and its incidence in some way or other.
	However, having looked at this year's Finance Bill, and in particular at the aggregate tax which has been referred to by a number of noble Lords, I believe that in many cases it would be possible to split—particularly with new taxes—those clauses which relate to the level and incidence from those which relate to the way that the tax provisions will work. For example, on the aggregate tax, there are 34 sections in the Act, only two of which relate to the level and to the incidence of tax. The rest is all detailed stuff. That could go into a Taxes Management Bill. This House could look at it, and, in doing so, we would improve the quality of the new tax legislation coming forward.
	I also think that with every new tax there should be a compliance cost report, so that at least someone will look at the likely cost of enforcing it. It does not mean that that will rule out the tax change, but at least it would force everyone to accept that if a tax brings in £X million, and it costs a tenth of X to collect it, perhaps we should look again at the matter. So, in terms of new taxes, a number of relatively straightforward measures can be taken.
	In relation to simplifying the existing system, the Tax Law Rewrite Project does one job extremely well; it takes this whole—I was going to say "amorphous", but it is not that—impenetrable mass and simplifies it to the extent of making it understandable. It does not simplify the content in any substantial way. That is not its role. It has a hugely important job, but by itself it will not lead to simpler taxation.
	The noble and learned Lord, Lord Howe, referred to the tax structure review programme being, as it were, almost an extension of the remit of the Tax Law Rewrite Project to take in more of the substance as well as the form of taxation. That has attractions but it will go only so far. For example, I do not believe that the tax structure review programme will be able to do very much about the business expansion scheme, except to make suggestions at the margin if the view is that the scheme has in some sense failed or has produced a counterproductive effect. What will be required is a strong political will by the Chancellor to remove it and so simplify the tax system. I have some questions in my mind about how far the tax structure review process will be able to do substantial simplification work.
	Taken all in all, I am a qualified optimist. I believe that it is possible to simplify the tax system. I do not believe, however, that we will go as far as we could without some changes in the way that taxation is considered by Parliament. I have described some changes that might be made. They will undoubtedly need cross-party support. Today's debate has demonstrated that a considerable degree of cross-party support already exists. We should now work hard, not least with and on our colleagues in another place, to bring about these changes.

Lord Saatchi: My Lords, I join other noble Lords in congratulating my noble and learned friend Lord Howe on his impeccable timing in bringing forward this debate to coincide exactly with the return of our self-assessment forms. No one could have asked for a simpler explanation of the need for tax simplification than the one we received in his characteristically crisp and clear opening speech.
	I echo the sentiments of my noble friend Lord Brooke and many other noble Lords who have paid tribute to my noble and learned friend and to the Inland Revenue's tax law rewrite team in improving the intelligibility of tax legislation, and for the light that they try to shine on notoriously opaque aspects of tax law. I look forward particularly, as I am sure your Lordships do, to the re-written Bills on income tax which we can expect later this year.
	The undoubted hero of the entire simplification project is indeed my noble and learned friend Lord Howe. He began a lifelong campaign for tax simplification in his maiden speech in 1964. Why is it that—as he and many of your Lordships have said—his lifelong effort to simplify taxation has proved such a struggle? It is worth remembering what my noble friend said about simplification having two meanings. The re-write process seeks to re-write the law in a way that makes it easier to understand. That is one aspect. The second, which perhaps my noble and learned friend's tax structure review committee will address—this is what I think the noble Lord, Lord Newby, was looking for—is to simplify the actual mechanics and administration of taxation. It is on that second aspect that I want to concentrate my remarks.
	The noble Lords, Lord Goodhart and Lord Newby, pointed to the tendency—my noble and learned friend said that it was a "virus"—to use the tax system for social change, or, as my noble and learned friend said, to "alter human behaviour"; in other words, to discourage an activity by taxing it or to encourage something by giving it a relief. After that one has to decide which class of person or entity should qualify for the tax or relief and in what amount. It is that which has created the present tax structure.
	Today, most people believe that the tax system takes around 39 per cent of GDP. But that is just the end result of the merry-go-round system which my noble friends Lord Selsdon and Lord Hodgson described. In fact, the total system collects a staggering 53 per cent of GDP. The citizen is then obliged to claim back 14 per cent of GDP—£143 billion—by navigating a mass of over 250 complex tax allowances, reliefs, exemptions, credits, tapers, indexations, disregards and so on.
	What this tangled web amounts to, as the noble Lords, Lord Peston and Lord Newby, said, is that the cost of collection increases. So today almost half of the increase in the Government's entire administration costs is allocated to the collection of tax or the distribution of benefits. It is an extra £1.8 billion in the Red Book. Yet—perhaps the most serious difficulty of all—billions of pounds a year of benefits and tax credits go unclaimed by millions of citizens who cannot fathom out how to claim them. For example, this year, following the introduction of the children's tax credit and the pensions credit, it is estimated that £2.6 billion of budgeted expenditure in the Red Book will go unclaimed.
	Perchance that brings us to the heart of the matter. I hope noble Lords will not think me too cynical. This is not supposed to be a party point. Possibly the result of all this complexity is lack of transparency, and perhaps that is the whole point of it. The charm of such a complicated tax system from the Government's point of view is the scope that it allows for hidden tax increases via reduced allowances. Under our structure the Chancellor can increase the tax burden without ever announcing a tax rise. People just wake up one day and find that they are in a higher tax bracket.
	No citizen, however intelligent, can match the massed ranks of No. 10, No. 11, the Treasury and Millbank—one man against the legions of Rome. So someone has to hold a torch for simplicity in the tax system and for my noble and learned friend's crusade. He certainly cannot do it on his own, however powerful a figure he is. It should, as many noble Lords have said, be Parliament. "Parliament is the key", said the noble Lord, Lord Barnett. I am afraid that the Institute of Chartered Accountants recently warned us that the tax system was now so complicated that it had,
	"spun out of democratic control".
	The noble Lord, Lord Newby, followed the views of the Treasury Select Committee in another place when he objected that the passage of Finance Bills through Parliament afforded insufficient opportunities for scrutiny of complex measures. The noble Lord, Lord Barnett, himself told the Commons committee that the way in which Finance Bills are examined by Parliament is totally inadequate. He told us the same today. The Institute of Chartered Accountants agrees with him. It states of our parliamentary procedure on Finance Bills:
	"Many of the provisions become law without either a thorough review or the time for second thoughts or worthwhile amendments".
	I shall offer your Lordships two suggestions that may help. I hope that they conform with the wish of the noble Lords, Lord Barnett and Lord Newby for a fully cross-party approach to the problem. First, I suggest that a new, simple measure of the ways in which governments raise tax revenue is needed to focus public attention on the true level of tax that people pay.
	At one time the public could look to the standard rate of income tax as the yardstick of whether their taxes were going up or down. But that was before the Treasury perfected its skill in cutting visible taxes on voters while raising invisible taxes elsewhere. That has rendered obsolete the old-fashioned measure of taxation. That is why the public are not this minute falling at the Government's feet in gratitude—this is my only political point, I promise—over their pledge not to increase income tax or VAT. The public know that that still leaves the Government with 248 other ways to raise tax.
	In response to all that, the Government's preferred replacement for the standard rate of income tax as the measure is what they like to call the "official tax burden" by which they like to define net taxes and social security contributions as a percentage of GDP. That is incomprehensible to most people. It is also, as my noble friend Lord McGregor said, distorted by the introduction of tax credits. So a different measure is required to assess the real level of taxation in the modern age. I hope that your Lordships' House can consider that in future.
	Secondly, it is now high time to end the antiquated and irrelevant ban on your Lordships' consideration of Finance Bills by a 100 year-old Act, the Parliament Act 1911. I am deeply cheered today to hear such distinguished voices as those of my noble and learned friend Lord Howe, my noble friend Lord MacGregor and the noble Lords, Lord Barnett, Lord Peston, and Lord Newby, raise that issue again. There is no doubt from reading the Hansard of the time that that iconic Act came into being to disqualify the then hereditary House of Lords from discussing money matters. That House of Lords no longer exists. We are about to be joined by elected peers. The grounds for the exclusion of your Lordships' House have disappeared.
	As my right honourable friend, Iain Duncan Smith, along with so many of your Lordships today, has said, the new, reformed House of Lords should be able to assist another place in scrutiny of the financial affairs of the nation. We hope that a Joint Committee on reform of your Lordships' House, which we are confident that the Government will want to consult, will consider that recommendation positively.
	I hope that the Minister is not about to give us the same dusty answer as did the noble and learned Lord the Leader of the House, who, sincere radical though he is, still clings to the 1911 Act to maintain the status quo. The noble and learned Lord says that no matter what the change in the composition of your Lordships' House, the primary legislative powers of the House as circumscribed by the Parliament Acts should remain unchanged, because,
	"Essentially nothing has changed that requires any modification of the Parliament Acts".—[Official Report, 24/01/0l; col. 299.]
	He is saying that, whatever changes are made to your Lordships' House, money Bills should continue to be X-rated material for your Lordships. We can look but we cannot touch.
	The Government's bad luck is that their immobilist approach on the matter has been struck what I think they like to call a double whammy. First, the elected House of Lords will inevitably have more legitimacy, which will inevitably lead to more powers, as the noble Lord, Lord Peston, said. Secondly, in the meantime—as many speakers said during our debate on reform last week—the scrutinising reputation of another place is beginning to wear thin.
	We can make a House of Parliament more legitimate and give it more power, or we can make a House less legitimate and give it less power. But what we surely cannot do is make a House more legitimate and simultaneously reduce its power, which is what the Government propose.
	In those two ways, first, by a simpler definition of the overall tax burden that people can actually understand, and, secondly, by the greater contribution of the experts in your Lordships' House, so many of whom are here today, governments would be more obliged to display greater transparency in their tax policies. Full disclosure would mean that governments could not hide from the political consequences of their tax actions. The scope for invisible tax could be reduced. The hidden effects of fiscal drag could be neutralised. I am hopeful, as is the noble Lord, Lord Newby, that the system can be revitalised and restructured for everyone's benefit.

Lord McIntosh of Haringey: My Lords, when I first ventured into politics as a junior member of a London borough council nearly 40 years ago, I joined the roads committee, the works committee, or whatever it was called, and I learnt a lesson that has still not left me. I had always thought that when people complained about the noise of vehicles on road surfaces, they had a legitimate complaint that could be dealt with by making the road surfaces smoother. I had always thought that when people complained about road surfaces being slippery and dangerous, they had a legitimate complaint that could be dealt with—presumably by making them less smooth.
	I had never put the two together. It was not until I put the two together that I realised that there was such a thing that I knew in business and economics as trade-off. In other words, there is no good answer to many such problems. We must make a judgment; we must consider the competing priorities. I am afraid that that is still true of tax simplification.
	I yield to no one in my admiration for the noble and learned Lord, Lord Howe of Aberavon, and the work that he has been doing not just in the tax law rewrite project but throughout his life in politics. As has been said, his maiden speech was on this subject. He recognises that there is no single objective of tax simplification that does not entail costs in its achievement. His excellent Hardman lecture, which I had the opportunity to re-read, was entitled not "Simplification" but "Simplification and Stability". Of course, stability must be taken into account. I give sincere and profound praise to the work of the Tax Law Rewrite Project and to the lifelong commitment of the noble and learned Lord to that cause.
	I am less confident about the timing of this debate. I think that it was the noble Lord, Lord Saatchi, who told us that its timing was good because there are eight days left in which to hand in self-assessment forms. I must disabuse him: self-assessment forms had to be in by 30th September for the Revenue to do the calculation; any form must be in by 31st January and the assessment must be done by the taxpayer. Perhaps this is an opportunity to encourage that.
	The noble Lord, Lord Selsdon, made an interesting contrast between Hector, the old inspector with the bowler hat, and Mrs Doyle, whom he described as a leprechaun. He described that advertising figure as hated and admired. I hope that as a professional, the noble Lord, Lord Saatchi, will agree that that is rather a good thing for an advertising concept. At least the noble Lord, Lord Selsdon, remembered it, so perhaps it is doing some good.
	Of course we maintain our commitment to tax simplification. I shall describe how we are seeking to further that commitment, but I must say that simplification alone is not what most people want. I think that that is generally recognised. Of course, simplification is not itself a simple subject. However, it will be generally recognised that simplification alone is not what most people want. It is not itself a simple subject. What most people want is a tax system that is simple but is also certain and efficient. As my noble friend Lord Peston said, being cheap to collect is one of the considerations. It must also be competitive and, above all, fair. My noble friend Lord Peston and the noble Lord, Lord Barnett, made that point with reference to horizontal equity. To be fair, I must say that the more considered comments on the tax system, including those made this afternoon, recognise that the tax system must achieve a balance of all those things.
	Where specific changes are proposed, the Inland Revenue, the Treasury and Customs and Excise take account of them. Suggestions have been made this afternoon that will be fed into the decision-making process. However, those who argue for simplification usually find it easier to argue for improvements in the process of tax legislation, rather than arguing about specifics. They do not tell us what reliefs they would repeal, what avoidance they would allow to go unchecked, where they would replace specific legislation with something more broad-brush and how they would ensure that the revenue needed for public services will not be lost. Instead—this has been true of this afternoon's debate—there is plenty of emphasis on procedures, additional committees or review programmes.
	I read with great care what the noble and learned Lord, Lord Howe of Aberavon, said in the Hardman lecture about the tax structure review programme. It is certainly an attractive proposition, but, as I understand it, one of the elements in it was that, first, the programme should make proposals for tax reform. There is a plethora of bodies making proposals for tax reform, not just your Lordships. Apart from anything else, what is the Better Regulation Task Force for? Secondly, the noble and learned Lord, Lord Howe of Aberavon, acknowledged that the word "guaranteed" was his and was not in the original Adam Broke formulation. He spoke of a guaranteed ability to get Ministers to promote changes. There are few people in public life who think that they could provide that guarantee.
	I recognise the passion behind the noble and learned Lord's condemnation of some of the existing procedures. I recognise the complaints about the time taken and the lack of time available for the Finance Bill. That is, to some extent, in conflict with his criticism of the PCTA, the objective of which has to be not just the continuation of taxes imposed annually—the part that he would retain—but the implementation of changes. Those changes can be reductions or increases. If they are reductions in either direction and if they are to be delayed because of the limitations on the PCTA, those in a position to take advantage of the delay will gain from it, and those who are not will not. That seems to help the rich—or those with better advice and more resources—at the expense of other people.
	We must ask why taxation is so complicated. Simplification is about transparency and clarity, and that is what the Tax Law Rewrite Project is working on and achieving. I look forward to the two income tax Bills that will appear this year and next year. Our approach—I had hoped that it would achieve some recognition in this afternoon's debate—was the code for fiscal stability, which is very much a Howe objective. It recognises that the conduct of fiscal policy has a critical influence on economic stability. The code has improved the conduct of fiscal policy by specifying the principles that guide the formulation and implementation of fiscal policy. Those principles are transparency, stability, responsibility, fairness and efficiency.
	It is not just a matter of having a code. What have we done? The most important thing that we have done in line with the code is the Pre-Budget Report. It is consultative in nature and includes, as far as is reasonably practicable, proposals for significant changes under consideration for introduction in the Budget. The noble Lord, Lord MacGregor of Pulham Market, referred to that. It is exactly the kind of thing for which he should argue and which he should recognise as being provided in practice by the Pre-Budget Report, which includes draft clauses, all of which are available for scrutiny.
	When we debated the Private Member's Bill introduced by the noble Lord, Lord Saatchi, last March, I resisted—and continue to resist—the proposals in that Bill. However, I said that the Government could see no reason why there should not be a Select Committee of the House to consider the Pre-Budget Report proposals—and any others—in advance of the Budget and contribute to the process by providing a report. I still hold that view. That is more practical than the challenge to the Parliament Act 1911 and the House of Commons resolutions of 1671 and 1678 to which the noble Lord, Lord Saatchi, appears still to be devoted.
	In the Pre-Budget Report and in the consultation process that follows, we provide greater transparency and clarity to help ensure a stable economic environment. I say particularly to the noble Lord, Lord Newby—although others made the point—that we have extended the amount of draft legislation in this area. There has been legislation on welfare reform, limited liability partnerships and, above all, financial services and markets, which, difficult though it was in practice, would have been unachievable without the pre-legislative scrutiny and the Joint Committee.
	Why is there so much complexity? It is, as the noble Lord, Lord Brooke of Sutton Mandeville, recognised, the complexity of the modern world. That complexity is reflected in the fact that several lawyers and accountants have spoken this afternoon. Many lawyers and accountants are better paid than those available to the Government. They seek to find ways round the tax system, and we must keep up. We must keep up with the way in which commerce and industry are conducted. If that means detail, it would be unfair if we were to abandon certainty to rely on court judgments on what we meant that might take years of waiting for. The search for simplicity should not be carried out at the expense of certainty.
	Complexity arises because we need to target tax measures on where help is needed. No one has argued that a rough and ready tax system is a price worth paying for a simpler system. Such an argument would not be tenable. Of course, we must report the cost of changes in our tax system. The noble Lord, Lord Newby, referred to that matter. We do so—rightly—in the Budget documentation.
	I referred to the need to counter abuse, avoidance and evasion. That need will not go away. I also referred to the issue of consultation and pre-legislative scrutiny. Most recently, the research and development tax credit for large companies and the new regime for intellectual property have been the subject of considerable scrutiny.
	I have here a much scribbled-over page about specific taxes to which noble Lords referred and which they criticised. Capital gains tax was criticised by the noble Lords, Lord MacGregor of Pulham Market and Lord Selsdon. The noble Lord, Lord Brooke of Sutton Mandeville, spoke about penny-packet incentive schemes. The noble Lord, Lord MacGregor of Pulham Market, referred to the complexity of the aggregates levy; in fact, that is an environmental measure. The noble Lord, Lord Goodhart, referred to the tonnage tax, although that tax was widely welcomed, and the wording of it is modelled on that in the Capital Allowances Act.
	Therefore, I do not think that it is open to me in the time that I have available to answer all the points about specific taxes, except in so far as they affect the simplification issue that is before us today.
	However, I would like to give one example of how complexity enters taxation because we are trying to do the right thing. I refer to the special 100 per cent first year capital allowances to encourage small businesses to invest in information technology to which the noble Lord, Lord Goodhart, referred. I believe that others did as well.
	The legislation introduced in the Finance Act 2000 has to define specifically which businesses can qualify, which assets can qualify and which expenditure can qualify. If that is not done it would not be comprehensible and there would be incessant law suits on the subject.
	The incentive has been welcomed by business. It represents a departure from the business accounts and from the general scheme of capital allowances for plant and machinery. It has been welcomed, in particular, by those who commented on a recent Inland Revenue technical note that looked at the case for more closely aligning profits for tax with the profits shown in a company's accounts.
	Another example that I constantly give when the issue arises is business assets. I was one who did not benefit from special treatment for business assets when I sold my business more than 10 years ago. Now that is available. The capital gains tax relief for entrepreneurs who sell majority shareholdings, or in some cases minority shareholdings, of their business, at any age, is available.
	The complexity of tax legislation is increased, but the relief is there because it is called for and because the need to encourage entrepreneurial activity is, frankly, more important than the number of pages in a Finance Act.
	Taxation is not to keep the Inland Revenue and the Customs and Excise amused and occupied. There are objectives that are set for our tax system—the objectives of ensuring economic stability; of raising productivity; of increasing employment opportunities and work incentives for everybody; of promoting savings and long-term investment; of tackling child poverty; and of ensuring a fair tax system that benefits the many and not the few.
	Therefore, we have to look at what we are doing in that sense. A number of noble Lords have rightly referred to the interaction of the tax and benefits system. One cannot look at the achievement of those objectives without bringing into account not just the tax system, but also the benefits system.
	The working families' tax credit helps over 1 million working families with children. Furthermore, 2.5 million children in this country benefit from working families' tax credit—an average of £35 per week per household better off. The noble Lord, Lord Brooke, said that it was not succeeding. I call it a profound and important success.
	The noble Lord, Lord Saatchi, makes the point regarding under-claiming and I do not deny that there is under-claiming of many of these benefits. However, we have to look at the net effect on child poverty and family poverty in this country to make a judgment about whether we are doing the right thing.
	Even in this regard simplification comes in because from April 2003 working families' tax credit, disabled persons' tax credit and children's credit will be replaced with two credits—a working tax credit and a child tax credit—which will continue to refine the integration of the tax and benefits systems. I know that some people object to those credits being paid through the wage packet but that has proved to be the most direct, available and improved way of tackling poverty—in other words, by making work pay.
	I now have a short time to turn to the ways in which we do seek to help taxpayers. I want to emphasise that for the vast majority of individuals who pay PAYE and do not submit tax returns, the simplification of the tax system is not a problem. It happens without their noticing. They do, indeed, think of their income as being their take-home income rather than their gross income. And why not? It is a perfectly reasonable way to run a family budget.
	For most people this is not actually an issue, but for those for whom it is an issue I was grateful to hear the noble Lord, Lord MacGregor, say that the system is easier. As I said earlier, for those who make their returns before 30th September—and I really cannot see that there can be more than a few thousand who cannot—the calculation will be done for them.
	I believe that the self-assessment programme has been a substantial success and if anything arises when I read the debate on the subject I will certainly respond to it. However, I do not believe that there has been any effective criticism of the way in which it has been progressing.
	Of course, business compliance costs are of enormous importance. Without admitting that compliance costs have gone up, I invite noble Lords who make that allegation to contrast it with lower corporation tax levels, the abolition of advance corporation tax, changes made to simplify the national insurance system, help with information technology and the review of payroll services by Patrick Carter.
	It is certainly true that change has been and will be needed. The business environment and the economy as a whole are changing rapidly. E-commerce brings challenges, not least the speed at which decisions can be taken and the location of companies. It is important that new developments do not bypass tax systems.
	Tax systems should not seek to frustrate, undermine or shackle that dynamism and development. I am sure that it is right, as has been said, that a business decision should be taken for business reasons rather than for tax reasons.
	We will continue to consult on change. All legislation has been, and will continue to be, subject to the scrutiny of agreement of Parliament. We will continue to be accountable to Parliament and to the electorate for our proposals. We will continue to inform people of their rights and obligations, to help those who want to comply and to tackle those who do not want to comply.
	Tax simplification is a worthy cause but it is not the only criterion for government, for Parliament, or for the citizens of this country.

Lord Howe of Aberavon: My Lords, in closing the debate I should like to thank all those colleagues who have been kind enough to pay tribute to me. Perhaps I may say a special word of thanks to my noble friend Lord Brooke, because he is a rather remarkable creature in more than one respect.
	Both his parents were life Peers and Members of this House. His father was the first Chief Secretary, an office which my noble friend also held. So he deserves to be acknowledged and congratulated as the first hereditary life Peer and the first hereditary Chief Secretary. I particularly appreciate his kindness.
	I believe that the debate has provided strong support for the case for simplification, rather than dealing with how it should be achieved. By the end, I was encouraged at the extent to which the understandable scepticism of the noble Lord, Lord Barnett, was being matched by contributions from my noble friend Lord Saatchi and the noble Lord, Lord Newby.
	I am slightly dismayed by the less than encouraging note struck at some points by the ever competent, ubiquitous, alibi witness for the Government, the noble Lord, Lord McIntosh. However, I am encouraged by his commendation and blessing of the tax rewrite scheme and his promise to do better in the future.
	Therefore, I thank your Lordships and beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

National Institute for Clinical Excellence

Baroness Knight of Collingtree: rose to call attention to the remit of the National Institute for Clinical Excellence; and to move for Papers.
	My Lords, with the benefit of hindsight, there are probably those in government who rather regret the name chosen for the body set up to review the clinical and cost effectiveness of NHS drugs and treatments. To look at drug effectiveness was fine, although I should have thought that the Medicines Commission could have done that. To look at value for money was perfectly reasonable, although to confine the search for savings to drugs and treatments, instead of searching more widely for other areas which could be run more cost-effectively—indeed, there are many such areas—was not very sensible.
	And the name—the name "NICE" damned it from the start. Whether those responsible shuffled initials around and purposely used the word "excellence" so that such a cosy name with such glittering promise emerged, I cannot say. But it was tempting fate to set this body on its way with a name that promised far, far more than it could possibly deliver.
	I do not blame the members of NICE. They were given an impossible task: first, to advise on what drugs and treatments are the most effective and whether they are cost-effective; and, secondly, to eliminate inequalities and postcode prescribing. But the two are incompatible. When you judge on evidence that a drug is good and effective—excellent, in fact—and then go on to say, "But it is very expensive and should be made available only to some sufferers", that is not very excellent for those who do not get it. It certainly does not eliminate inequalities of treatment. So far as I can see, NICE has no duty to say, "What is to happen to the unlucky ones for whom treatment is denied?".
	The debate gives us an opportunity to ask the Minister for clarification on a number of points. According to one set of papers I read, health authorities must obey the diktats of NICE. If NICE says that a certain drug or treatment should be made available, then it must be. Is that right? I tend to feel that doubt is creeping in because another source of evidence states that if health authorities cannot afford the drugs and treatments advocated by NICE, then they will not make them available. Which of those is correct? It must be one or the other; it really cannot be both. Do the Government have a statutory obligation, as was welcomed in an Early Day Motion put down in another place as recently as 13th December last,
	"to fund all treatments recommended by Nice"?
	If that is so, why was there strong criticism only a week ago today that the drug approved by NICE for Alzheimer's was only very sparsely prescribed because of lack of funds? I thought that the position was clear when I read a speech made in July last year by Yvette Cooper, the Parliamentary Under-Secretary of State for Public Health in the other place, who stated:
	"All health authorities must adhere to [NICE's] guidance".
	Later on in the same speech she said that:
	"Health authorities need to fund the drugs and treatment recommended by NICE".—[Official Report, Commons, 4/7/01; col. 88W.]
	Right, so we know where we are. But oh, no, we do not. That is because many health authorities are refusing to fund new drugs—for instance, for lung cancer—despite NICE's backing for those drugs. Cancer Bacup states that under 15 per cent of authorities have set aside the necessary money for the purpose.
	So much doubt has been cast on this—perhaps because of a number of warnings that such expenditure will lead to cuts in treatments for other patients; there are plenty of examples—that one Member of Parliament serving on the Health Select Committee, which noble Lords will be well aware is currently studying the work of NICE, said that he was "completely confused" about the matter. Expert witnesses were available in plenty, but they simply could not help him because they simply did not know. I wonder whether perhaps the Minister knows and whether he might help. It would be so good if he could do so.
	Points also need to be made about the formula used by NICE to decide who shall have drugs and treatments and who shall not. It is called QALY. Noble Lords may ask what is that; it is the initials by which the standard is known, representing the words: "quality adjusted life year". I really hate this. The notion of a group of people in an office, looking not at patients but at statistics, not at individuals but at calculated norms, not at family or circumstances, or achievements, or capabilities. but at pounds and pence, is anathema to me.
	Of course it is a huge and always increasing problem for the Exchequer. I certainly recognise that. Modern drugs and treatments are unbelievably expensive. I made a few inquiries into this. Beta interferon, for example, costs around £10,000 per patient per year. Some treatments can cost even more. Incidentally, can the Minister say why this drug costs so much in Britain, but is available at half the price in America and southern Europe? Can he look into this? If that is the case, perhaps we could reach an arrangement with those two areas so that we are provided with cheaper drugs than we are using at the moment.
	But my main point is that by adopting the principle that some patients should be left to suffer because they are judged not to be worth the cost of their treatment is simply not acceptable in a humane or Christian country. Once that principle is accepted, as it is by NICE and, apparently, by the Government, then it is only a short step—having decided that the patient really is not worth the cost of treatment—to wonder whether there is much point in keeping them alive at all.
	Of course I am well aware that for many years doctors and midwives have had to reach decisions in their own practices with regard to their own patients on whether, say, the baby being born will have a normal life. They have done whatever they thought was right at the time. I am not happy about that situation, but I really do not think that it should be government policy to set out guidelines on which patients shall be treated and which shall not.
	QALY may not be the only yardstick used to decide who should receive treatment, as is claimed by the chairman of NICE. But that it exists at all should give us cause for the gravest concern. There really are other ways in which money could be saved or spent better in the NHS. I should be more than happy to suggest a few, but tonight's debate gives neither the time nor the scope for that. I hope that perhaps we shall have a debate soon which would allow us such interesting opportunities.
	But I must get back to QALY. I wonder whether age is a factor considered by NICE when it looks at and constructs this particular yardstick. I do not know—I wonder whether any noble Lords know—the precise details of this rather mysterious ruling. Only a short time ago the Government stated categorically that they would not touch ageism with a barge-pole and that age should not be a bar to receiving the drugs that patients need. I do not know whether that statement is accurate, but again that is something for the Minister to confirm.
	The chairman of NICE said that patients' views are also considered when QALY is decided. Are they? The Macmillan Cancer Relief charity has said not. Only last week, at the Select Committee, it called upon NICE to review its procedures and to bring in patients' views more firmly. It said that NICE accords low priority to patients' inputs and is failing to listen to patients' views.
	Was Macmillan Cancer Relief the only charity to claim that? No, it was not. The Consumers' Association made it clear that it held the same view, as did the National Cancer Alliance. There was also concern among these organisations that NICE was not open and worked too much in secrecy. The Multiple Sclerosis Society complained to the Select Committee that it never knew whether or not its input was worth while. It also said that the long delays in reaching decisions is tied up with this. I understand that with so much evidence to study delays are, to some extent, unavoidable, but sometimes there seem to be delays which are not excusable, many of which are on record.
	The MS Society gave written information on its appraisal system for beta interferon and was told by NICE that there were gaps in its submission. The society asked what and where were the gaps and pledged to deal with them at a meeting to be held some three months later. NICE took until two days before that time to say what were the gaps. But surely it must have known what were the gaps before it complained. NICE not only gave too little time for planned discussion but, apparently, the facts of the alleged gaps were, according to the society, "very sketchy".
	I feel that I should add my own comment about secrecy: there has never been a public debate on the adoption of QALY. Accountants may approve, but bishops will not. Well, I am not sure about that because, these days, I do not know what bishops will or will not agree. I am only certain that they will not all say one thing or the other. However, my point is that the subject should have been discussed.
	I turn now to another important issue. We all understand that when NICE was set up its purpose was to take away from government the decision-making process of what drugs should be supplied and paid for by the NHS; that it should be an independent organisation scientifically to evaluate new drugs and advise independently whether or not drugs and treatments were effective. Now we have a situation which implies that this is not so. NICE has not so far reached its decision on beta interferon, but the Government are jumping in and having their own trials on it. It seems extraordinary that before NICE has said what it thinks, the Government, by their action, indicate that never mind what NICE decides, they will have their own look at that particular drug. Is the original understanding correct? If so, why are the Government stepping in?
	In its submission to the Select Committee, the Consumers' Association identified serious shortcomings in NICE's appraisals of health technologies. The drugs and therapeutics bulletin reviewed all nine NICE guidance documents and found serious flaws in every single one of them. Is this the kind of thing which has led the Government to start their own investigations or what? No one denies for a moment that NICE has a complicated remit, but on the present evidence we must acknowledge that there is a worrying number of grave concerns about the way in which NICE works—concerns about whether its judgments are right, about secrecy, about undue delays, about the yardsticks used and about NICE's role versus the Government's role. I invite the Minister to think about all this and, at the end of the debate, to have a shot at clearing up all these problems. I beg to move for Papers.

Lord Addington: My Lords, I have discovered—unusually for someone who is speaking only second in a debate—that the noble Baroness has covered many of the points which led me to get involved in this debate.
	I first paid attention to NICE as a result of the great beta interferon and multiple sclerosis initiative, primarily because my main concern—disability—was drawn into it. Here was a drug treatment which may well prevent an illness which could cause someone to be permanently disabled. It seemed to me absurd that this treatment could be refused.
	As to costing—and it has been said that this does happen—I have spent a considerable amount of time searching the NICE website and looking here, there and everywhere, but I could not find the costing formula for this. Presumably there is costing in every other area; presumably a formula is used. I shall not repeat every single acronym involved in this process, but there must be something going on here. How much in terms of disability living allowance and other benefits could be offset against the cost of these drugs? How much should the average wage be brought into the equation? Where is the equation given? In what areas does it work?
	I believe that another debilitating condition—rheumatism—will be covered later in the debate by another noble Lord.
	With any luck, drug treatments will get better—but this situation will arise again in all fields. It is to be hoped that all degenerative illnesses will one day have some kind of treatment which, even if it does not totally reverse them or stop them, will at least make life bearable, but, if this situation is on-going, we should surely have something built into the system which could kick in straightaway and dictate what we should do.
	Unless we bring in a system to deal with it, the beta interferon situation will arise again and again and we will create a situation guaranteed to let people down every time. We are not bringing in a system to deal with it. We must build and structure into the situation a system which takes account of matters across the board.
	Later today I shall be taking part in the Second Reading of the Disability Discrimination (Amendment) Bill. How far does the NICE situation spill over into another area where we are denying people their rights? I do not say that there are any limits to what is going on—I can ramble on for 15 minutes or I can stop very quickly—but it would seem that we have drawn our circle very tightly in dealing with the situation. All the internal talk is ultimately about the health service. Clearly, we are not looking wide enough.
	I know that the Minister's job is to defend the current system, but please can he take on board and take back to the Government that we need to know whether consideration is being given to the problem. That is the least that we have a right to expect.
	All the charities and organisations which are in the vanguard of these current struggles, and which will be in the vanguard of the struggles that will go on in the future, feel that the system is far too bureaucratic and that it is not user friendly. That theme ran through the evidence about which the noble Baroness has spoken. The organisations are not sure what is going on and feel that the system is not open enough. They feel that the lay person has no real chance of getting a handle on the issue.
	We all know that the campaigning carried out in this area in this country is driven by the lay community associated with these causes. We have all dealt with such bodies, which provide us with briefings on a regular basis. Ultimately, unless we can open up the system, no matter what we do—even if the noble Lord takes my advice and does his calculations—we shall not know about it properly. We shall not understand it and we shall keep coming back to it. If the noble Lord can address these points, he will deal with many of the concerns that people have.

Lord Colwyn: My Lords, I thank my noble friend Lady Knight for initiating the debate. She is a great campaigner and I thank her for giving me the opportunity to say a few words about the relationship between NICE and dental surgery. With that in mind, I declare an interest in that I am a practising dental surgeon.
	The latest press release that I have received from NICE, dated 6th November 2001, informs me that, last year, it issued guidance that had the potential to affect the care of over 10 million users of the NHS and their families, and that it now expects to issue over 100 guidelines each year. It states that contact has been established with multi-professional partnerships to set up national collaborating centres to help with its authoritative guidance on healthcare for healthcare professionals and users of the service. NICE will create a new partnership between the Government, the National Health Service and clinical professionals. By establishing NICE the Government will take responsibility for helping to clarify, both for patients and for professionals, which treatments work best for which patients and those which do not.
	This is a massive responsibility and commitment. I am sure that it is no coincidence that, on 23d November, the Health Select Committee announced that it would be holding an inquiry into NICE. I understand that the inquiry is ongoing and that the committee has been taking evidence today.
	Until recently, the professional organisations were reluctant to give guidance on clinical techniques. However, we now have many different authorities telling professionals what they can and cannot do, and what materials they can and cannot use. I have debated this with the Minister on many occasions, largely in connection with the administration of general anaesthetics in the dental surgery, where the General Dental Council, which will soon have many more members who are not dentists, issues new guidelines on this particular clinical practice on a regular basis—seeming to many of us to be out of touch with the real world. To give a further example, the Department of Trade and Industry—for some reason that is not understood by the dental profession—has taken responsibility for the materials that can and cannot be used in bleaching techniques.
	It is important that the healthcare professions understand who ultimately controls guidance for clinical techniques. The stakeholder organisations—of which the British Dental Association is one—must be concerned about the potential for a lack of independence in NICE's activities. This can be allayed only by close partnership between NICE and the stakeholders. The NICE key principles for NHS guidelines, together with recognition of the importance of taking account of existing guidelines and the best available evidence, are crucial.
	The dental profession does not believe that NICE can, or should, aim to provide a single national focus for guideline setting. I know that the British Dental Association has expressed its concern about the need to avoid duplication and to ensure that all organisations involved in guideline setting are consulted and given the opportunity to participate in relevant activities. To this extent, the development of its commissioning process and the stakeholder involvement mechanisms that have been introduced have been welcomed. Guidelines must be credible and robust; and, if they are to be implemented as such, they must be developed by individuals with relevant practical experience and by organisations that have the confidence of the profession.
	The first NICE guidelines for dentistry were on the removal—or not—of wisdom teeth, which were set out in its Technology Appraisal Guidance No. 1. This was generally welcomed by the profession, but was noted to be a re-hash of the existing guidelines from the Royal College of Surgeons, which were already followed in the NHS but did not take account of the most recent research.
	It is rumoured that we are about to be advised on the relevance of the six-monthly check-up and the need for treatments for gums. I can assure the Minister that those in the dental profession advise their patients individually on the ideal intervals between check-ups and gum treatments. Some may need to be seen every three months, some annually and some every two or three years. It varies according to the individual's ability to look after himself or herself. It should also be remembered that the check-ups include an examination for oral cancers and are a vital link in the prevention of this debilitating disease.
	Dental care has a high ratio of private provision. About half of the money spent in a year on dentistry outside hospital is paid by patients. NHS guidelines which concern cost-effectiveness must make very clear the context in which they are issued, and must recognise that NICE is unable to make recommendations concerning cost-effectiveness in private care. Once again, I thank my noble friend Lady Knight for introducing the debate.

Lord Roberts of Conwy: My Lords, I, too, compliment my noble friend on securing this debate.
	In this House NICE is not the most popular body, judging by questions that have been asked and by what has been said so far in the debate, and we all know why. NICE is regarded, rightly or wrongly, as the body which prevents certain types of patients from obtaining the drugs and treatments that they desperately need, and which would be prescribed for them by their doctors if those doctors were not convinced that their clinical judgment would be thwarted one way or another if NICE did not approve. That is the case in the beta interferon/MS saga.
	So there is some truth behind this harsh popular perception of NICE. However, it is not the whole truth, as I am sure the Minister will tell us in replying to the debate. The health service circular which set out NICE's initial work programme makes it clear that NHS bodies should,
	"continue with local arrangements for the managed introduction of new technologies . . . where NICE's guidance is not available at the time the technology first becomes available".
	In theory, therefore, there is no let or hindrance to NHS bodies allowing the prescription of drugs and the giving of treatments referred to NICE for appraisal, or if the appraisal process is incomplete. One would have thought that in such circumstances local clinical judgment would prevail, but that has not always been the case—far from it: other factors such as the availability of funds and resources, and local priorities, have come into play.
	I have a particular interest in the availability of anti-TNF alpha drugs for the treatment of rheumatoid arthritis. For those noble Lords who are interested in definitions, I turn to the definition of TNF in a paper prepared by a team some time ago, led by Bryan D Williams, professor of rheumatology at the University of Wales College of Medicine, of which I have the honour to be president. The paper states:
	"Tumour Necrosis factor has emerged as a key molecular target for the treatment of rheumatoid arthritis. Two effective new therapies infliximab (Remicade) & etanercept (Enbrel), the first of their kind as biological response modifiers and disease controlling anti-rheumatic therapies, have become available . . . for the treatment of severe resistant rheumatoid arthritis".
	My interest in the subject began as a personal matter. My youngest son suffers from the disease and, initially, he could not obtain the appropriate drug. But I soon realised that there were many others in the same position. So it has become a matter of national interest. There are some 600,000 people who suffer from rheumatoid arthritis in the United Kingdom. There is no doubt that many of them—but by no means all—could have their suffering relieved by the used of these anti-inflammatory drugs, which are currently being appraised by NICE.
	I am in touch with the leading medical authorities on rheumatoid arthritis throughout the UK and last year I helped form the National Rheumatoid Arthritis Society to raise the profile of the disease and its alleviation. There is no doubt about the efficacy of the drugs in appropriate cases. The Minister has acknowledged it in a letter to me dated 9th November last year. He said:
	"There appears to be clinical evidence that these anti-TNF drugs can help a proportion of patients to achieve better control of their arthritis, with reduced pain and disability, when treatment with existing drugs has failed. Unless there are appeals, NICE expects to issue its guidance in March 2002".
	Last year, the British League Against Rheumatism and the British Society for Rheumatology carried out a survey of 185 of the UK's 215 NHS trusts. Their preliminary findings showed that postcode prescribing of the treatment was rife, with wide variations across regions, within health authorities and even within trusts. Rheumatologists in nearly one third of trusts are unable to prescribe the drugs. Nearly half of the remaining trusts' rheumatologists were able to prescribe the drugs to only a handful of people—fewer than 10. Only in around one sixth of the trusts covered in the survey did rheumatologists have adequate funding to meet the need.
	Those findings, which are not yet verified, but which are borne out by experience, should send shivers down our spines. Postcode prescribing is a dreadful form of inequality and discrimination. It means that whether a patient suffers depends on where in the United Kingdom he happens to live. That is grossly unfair. I must make it clear that I want to end postcode prescribing not by prohibiting the use of such drugs when they are available, but by making the drugs generally available to all who need them and qualify for them. Of course they are expensive. They cost about £8,000 per annum per patient.
	One must also consider the position of the rheumatologists under those findings. They are unable to prescribe according to their best clinical judgment because of a shortage of funds. The rheumatologists are in an intolerable position. I am not sure that they are not offending in some way against their Hippocratic oath. There are also implications for the United Kingdom as a whole. The drugs are available in the United States, where they are even given to children who are showing signs of rheumatoid arthritis. They are also available in a number of European countries. Where does that leave the NHS? It leaves us looking very backward and retarded compared with other countries.
	I am sure that there are also implications for the future of the pharmaceutical industry, which contributes so much to medical research in the United Kingdom. It cannot be much encouraged by the fact that the market for the drugs is so weak that it cannot bear the cost.
	Many of us are concerned, because we get the impression that NICE is being used as a delaying tactic, a rationing agency and a cover by the Government for a lack of adequate funding for the NHS. How can that be true when the Government say that they are pouring more money than ever before into the NHS? The latest news is that the NHS is only just about breaking even and some regions, such as the South East of England, are heading for a deficit.
	Would not the use of funds to make those drugs available assist the Government to achieve their targets for the NHS? The current Secretary of State certainly believed so in 1998, when he told the other place:
	"If drugs mean easier, better and quicker treatment for the patient instead of going to hospital, that is a good thing and if it means growth in the NHS drugs bill, we should welcome it. . . . we want a more rigorous assessment of what is cost effective and clinically effective, particularly when drugs come on to the market".—[Official Report, Commons, 28/7/98; col. 158.]
	I am not sure that those words are reflected in the Government's current policy. Things have changed since those words were uttered in 1998.
	I am also greatly worried about whether NICE takes account of the cost of a disease in its appraisal. It is estimated that rheumatoid arthritis costs the country £1.2 billion a year in benefits, income tax lost because of inability to work and so on. I have been assured by the Minister that it can take such matters into account. In a Written Answer to me, he referred to the framework document for NICE, which states that,
	"its task is to assess the evidence of all clinical and other health-related benefits of an intervention—taking this in a wide sense, to include impact on quality of life, relief of pain, or disability etc as well as any impact on likely length of life—to estimate the associated costs, and to reach a judgment on whether on balance this intervention can be recommended as a cost-effective use of NHS and PSS resources".—[Official Report, 11/12/01; col. WA 193.]
	I am grateful for that assurance, but I am not sure that it works in practice and that NICE takes the full costs of a disease such as rheumatoid arthritis into account.
	I have concentrated on rheumatoid arthritis because I know something about it. There is also the saga of beta interferon and MS. The Government should take a firm grip on the whole area. So much suffering could be relieved and so much saving could be effected by the use of the most modern treatments available. NICE would be well advised to cultivate a more positive reputation than it has at present.

Lord Astor of Hever: My Lords, I congratulate my noble friend Lady Knight on bringing before the House the important subject of NICE. She is a great and very successful campaigner, as my noble friend Lord Colwyn said.
	Last week, the Government announced that NICE, the Commission for Health Improvement, the National Clinical Assessment Authority and the National Patient Safety Agency should work more closely together to establish a more coherent approach to standard setting, regulation, monitoring and inspection of healthcare. The Government also made a commitment to establish a new council for quality healthcare, encompassing the bodies I have mentioned, to facilitate co-operative working on the functions they jointly pursue.
	We on these Benches are concerned about whether the new council, or anyone therein, will be given the very important and necessary role of overseeing quality and standards in public health services. The recent failure in public health is a very great concern. On 10th January, the Chief Medical Officer announced a new committee—the National Infection Control and Health Protection Agency—which will assess the threat of new and emerging infections and disease and implement vaccination. That is necessary simply because of the Government's lamentable failure in public health. We have decreasing immunisation rates and an increasing incidence of infectious diseases and sexually transmitted diseases. There is need for a body that can take concerted action across departments.
	As I understand it, the council for quality health care will have overarching supervision of NICE, CHI, the NCAA and the NPSA. It will also ensure that, together, those constituent organisations work more closely with the Social Services Inspectorate, the National Care Standards Commission and the Audit Commission.
	During a debate in the other place on the National Health Service Reform and Health Care Professions Bill, which we shall very shortly be considering in this House, my honourable friend Oliver Heald suggested the urgent need for more management, co-ordination and provision of quality public health services in the NHS. He suggested that the role be given to a unified body. The newly announced council will unify NICE, CHI and the other bodies vested with ensuring quality in the health service. I wonder whether that body, with its collective role—NICE providing clinical guidance and perhaps taking on a new screening role, and CHI with its inspectorate responsibilities—might be an appropriate organisation to house within it a much needed public health role.
	The BMA has expressed concern that the Bill's new arrangements may lead to some areas having no public health doctor advising either the primary care trust or the strategic health authority. Statistics on public health make gloomy reading. The number of BCG vaccinations decreased from 518,000 in 1997, to only 137,000 last year—a decrease of almost 400,000—yet the number of TB cases reached a 15-year high. According to the British Thoracic Society, the number of adults and children with the respiratory disease TB was at record levels. London is the TB capital of the western world.
	In addition to the considerable risk of a TB outbreak, we are also at risk of a measles epidemic, as the levels for MMR have fallen to as low as 72 per cent in London, compared with a "safe" uptake level of 95 per cent. The most important task we have is to protect our children. To do that, we must have sufficient immunisation levels to prevent any possible epidemic. We have seen the tragic effects of failure to immunise in Ireland and the Netherlands, where children have died as a result of the disease.
	I believe the evidence that suggests that MMR is safe, and I am not convinced that there is any link between MMR and autism. However, many of the public and some in the medical and nursing professions believe otherwise. That is resulting in considerable public health risk. It is a huge failure of the Government's public health policy neither to reassure the public effectively nor to provide an alternative. We simply cannot sit by and watch immunisation rates fall to levels that will virtually guarantee a measles epidemic.
	The increase in sexually transmitted diseases also has been remarkable. Between 1999 and 2000, the incidence of syphilis increased by 5.1 per cent, gonorrhoea by 25 per cent and chlamydia by 12 per cent. We have seen similar pictures with other diseases.
	The Government have a duty to protect the public's health, but currently they are failing. In his wind-up speech, can the Minister tell the House how the Government intend to ensure higher quality standards of public health provision?

Baroness Howells of St Davids: My Lords, I am grateful for the opportunity to speak in the gap; I had some problems getting to the House today. I also thank the noble Baroness, Lady Knight, for introducing this debate. I shall concentrate on NICE itself.
	In establishing the National Institute for Clinical Excellence, the Government have given all clinicians the opportunity to adhere to informed, sensible and, I believe, strictly scientific advice. NICE is here to ensure that patients receive better care, and the indicators are that it is already having that effect. To date, NICE has made significant progress in identifying effective medicines and treatments and spreading their use quickly throughout the NHS. We should be aware of that fact.
	In less than three years, NICE has become established as an integral part of our National Health Service. Its work reaches into all aspects of the NHS, from wider judgments on whether a new treatment is clinically effective and cost effective to assessment of what care is best for the individual patient.
	The NHS can no longer tolerate postcode prescribing whereby decisions on what care is best for a patient are made on the basis of widely varying funding policies. We need the institute so that, as we go forth towards the end of this century and new medicines become available, we have one body that establishes and helps us to decide what is best for the people of this country.

Lord Clement-Jones: My Lords, we are all grateful to the noble Baroness, Lady Knight, who has raised some very important issues in an extremely trenchant and thought-provoking way.
	On a number of occasions, Ministers—including the noble Lord, Lord Hunt—have promised a full review of the work of NICE. That review should have started half way through last year. Very regrettably, rather than establishing a full review, Ministers seem to be content to respond to the recommendations affecting NICE made by the Kennedy report on children's surgery at the Bristol Royal Infirmary. A full review would have been preferable. Evidence should have been taken, and a far wider range of recommendation should have been considered.
	The Government's response to the Kennedy report was published last week. The original report made clear recommendations on a more independent role for NICE. The Government's response was half-hearted, to say the least. The dissemination of NICE guidance, we are told, will no longer need the approval of a Secretary of State for Health. What a big step! On the truly crucial issue—the selection of topics for appraisal—we are fobbed off with the promise of a consultation document. When will that be forthcoming? Should not NICE, subject to consultation with its stakeholders, be able of its own volition to choose its own topics for appraisal? Would it not raise the level of public and professional trust in NICE if it were seen as more than a creature of government? What real impact will yet another body that the Government propose to establish—the council for quality health care—make? It seems to be another body to co-ordinate a whole series of other bodies. I am afraid I do not share the presumed optimism of the noble Lord, Lord Astor, in that respect.
	In the absence of a government review, the other mechanism for change, apart from the Kennedy report, is the current Health Select Committee inquiry into NICE, referred to by a number of noble Lords. I welcome the Select Committee's initiative. It has given rise to a number of very interesting contributions, most of them dealing with issues of common concern not dealt with in the Government's response to Kennedy.
	NICE's evidence is also of great interest. Although sorry to see that it did not support the Kennedy report's recommendation that it should become a non-departmental public body, I welcomed its suggestion that its work programme be constructed in a more open and inclusive manner and that there should be an annual report to Parliament. Many of the areas of concern have been aired in debates in this House, not least in our debate last April.
	The original remit of NICE included the important role of looking at the cost-effectiveness of treatments. It also had its remit extended at the last moment to look at the affordability of treatments in its appraisals. However, I have been assured that that latter role is only activated at the request of Ministers and that it has not been so activated to date. It is therefore, contrary to expectation, NICE's role and methodology in assessing cost-effectiveness which have given rise to many of the problems to date. It is that which has fed the belief that NICE is engaged in a rationing exercise and taking quasi-political decisions.
	As I pointed out last April, one of the key problems is the scientific basis of the appraisals, highlighted in the Beta interferon and the glatiramer acetate appraisal. That was referred to not only by the noble Baroness, Lady Knight, but also by my noble friend Lord Addington. That appraisal raises fundamental questions about how NICE will accommodate access to drugs for rare diseases and the appropriateness of cost-economic evaluation—the QALY—in the treatment of low prevalence diseases. The superimposition of standard cost-effectiveness criteria on to the assessment of a drug for a rare disease is not always appropriate. How can existing treatments be compared when the orphan designation implies that there are no satisfactory methods of prevention or treatment of the condition?
	As I pointed out, conventional health economics techniques are based on the availability of a wide range of comprehensive data needed for the appraisal. But in the case of rare disorders, often for practical, ethical and scientific reasons, it is impossible to provide equivalent comprehensive data. Innovative products which treat diseases are often by their nature unique and cannot therefore be assessed by the use of traditional cost-effective assessment methods—I am sorry that that is rather technical language.
	Since that debate I have not heard or seen anything which persuades me that NICE has properly grasped this issue. Quite the contrary. Clearly we need changes to the system so there is proper recognition of the issues which surround rare diseases and orphan drugs. Like the EU, we need recognition of the specific nature of rare diseases and a different appraisal system for orphan drugs such as beta interferon and glatiramer acetate. The cost of the illness and the burden of the disease—a point made by my noble friend Lord Addington and the noble Lord, Lord Roberts—must be properly taken into account in relation to those orphan drugs.
	A further cause for concern remains the lack of transparency of NICE—mentioned by a number of noble Lords. As mentioned by the noble Baroness, Lady Knight, in December last year the Consumers' Association published a report on NICE. It concluded that it needs to become much more open as to how it arrives at decisions. In its evidence to the Select Committee, the Consumers' Association goes further and claims that there were serious flaws in the nine NICE guidance documents it examined in detail. It compared Scotland favourably with England in that respect. It says it is difficult to see what impact evidence from voluntary organisations has. Is NICE relying too heavily on clinical trials data and overlooking quality of life information? Is it applying a crude, cost-effectiveness threshold, as many claim, of £30,000 per QALY? Perhaps the Minister can enlighten us.
	Current processes and methodology concern patient organisations in particular. I declare an interest as a trustee of Cancer BACUP, the cancer information organisation. It has been heavily involved in submitting evidence to NICE appraisals for a range of cancer treatments since NICE started its work. In its evidence to the Select Committee it expressed concern about delays. It takes a year, on average, to carry out an appraisal, excluding appeals. Clearly, the process should be faster.
	What is holding appraisals up? Is it a lack of resource? The Minister has consistently assured us that NICE does not lack adequate resources for its work. Can he repeat that assurance? NICE's evidence to the Select Committee seems to imply that that is not the case. With delay there comes the phenomenon known as "NICE blight". Physicians hold back from prescribing a treatment pending the outcome of the appraisal. In those circumstances, health authorities hold back from funding.
	Cancer BACUP also expresses concern about the absence of adequate data on quality of life issues. It believes that issues relating to patient priorities and quality of life should be subject to separate research.
	Now we come on to the even more difficult subject of implementation. That of course is not strictly within the remit of NICE. But there is little point in NICE appraisals unless they are implemented. The Minister assured us that the money is there. In fact the Secretary of State has now promised that there will be a statutory duty on health authorities from this month to fund NICE appraisals. That is welcome, with caveats, if indeed it is correct.
	My honourable friend Sandra Gidley MP carried out a survey in May last year which demonstrated considerable divergence by health authorities in their funding of appraised treatments. One in five health authorities are not funding one or more approved drugs. There are clearly major geographical variations. In a recent Cancer BACUP survey—referred to in NICE's evidence to the Select Committee, so it must be respectable!—it was found that taxanes as treatment for breast and ovarian cancer were almost universally funded, but that only 15 per cent of respondents said that specific funds are available to implement NICE guidance on lung cancer treatment.
	The postcode lottery is still with us. Yet in the NHS cancer plan launched in September 2000 there is a clear government pledge to ensure that NICE recommendations are fully funded. That is belied as we speak by the experience of many hospitals. Clearly, allocations are not being spent on what they were allocated for.
	But it goes further than that. The systems for monitoring are not there. In the Cancer BACUP survey, it was found that fewer than half of all health authorities in England and Wales had a policy for monitoring local compliance with NICE guidance, although 80 per cent had a written policy for assessing the implications of NICE guidance. Do current performance assessment procedures contain any requirements in that respect? Perhaps the Minister can answer that question.
	What assurance can the Minister give for the future? Will extra, identifiable and adequate funding be made available to implement past and present NICE guidance? Will monitoring systems be installed in each health authority or strategic health authority to ensure that a check on statutory implementation is kept? How will the statutory duty be enforced? Will the patient have a right to enforce the duty? Without that we shall simply be robbing Peter to pay Paul with the raiding of other budgets and distortion of clinical priorities. Some, such as Professor Alan Maynard, already believe that that is the case.
	In conclusion, I recognise that NICE is to a high degree caught between the competing forces of government, patients and pharmaceutical companies. On balance, its impact has probably been positive. Although there are criticisms, we should recognise that it is performing a vital role and few of us would want to turn back to pre-NICE days. In this House we are all subject to entreaty about the outcome of NICE appraisals, not least in this House tonight. I believe a strong, independent but responsive NICE is of great importance.
	It was always known that that would be a difficult role. But NICE seems to have been slow to respond to experience or criticism, and the quality of its communications has sometimes been enormously lacking. As a result there is already some clear sign of government embarrassment. The Government have already had to contemplate ways round their expected decisions on beta interferon and glateramer acetate, as with its risk-sharing discussions with the industry. The Minister protested when I raised that recently in a Starred Question and said that it does not demonstrate a lack of confidence in NICE. Time will tell.
	It should be clear beyond peradventure that the Government have the responsibility of making political decisions about resources available to the NHS, not NICE. The sooner it steps out of that particular arena, the better. Yet that could be done at the same time as giving greater independence to NICE, along with more resources and a greater remit.
	I am not yet convinced that NICE has demonstrated the transparency or sureness of touch that are necessary for its role, or indeed the flexibility of methodology needed. I hope that it will heed some of the points made today—and that Ministers will do likewise—and in evidence to the Select Committee and make the changes that are almost universally asked of it.

Earl Howe: My Lords, I join other noble Lords in thanking my noble friend Lady Knight for bringing this important topic to our notice today and for speaking to it, if I may respectfully say so, in such a clear, concise and persuasive manner.
	Nearly three years into its life, NICE and its work and way of working are ripe for review. That, coincidentally, is the view held by the Select Committee in another place which is currently in the midst of taking evidence. I hope, too, that it is the view of Ministers. I shall come back to that last point in a moment, but in the meantime I trust that the Minister will regard this as a good opportunity to listen to the observations of those of us who have followed the progress of NICE from its beginnings and who, despite perhaps understandable misgivings about it, wish it well.
	For there can be no doubt that the rationale for NICE, as originally presented by the Government, was a thoroughly worthy one. There was certainly a need to address and put right the grosser examples of so-called "postcode prescribing". There was much to be said for a body whose job it would be to evaluate treatments in a dispassionate, impartial way and to provide advice and recommendations on them to the health service. We all acknowledge the imperative to ensure rapid access for patients to new and innovative treatments. That was the good side of the rationale. But did it end there?
	There were those of us three or four years ago who believed that the Government had darker motives. We believed that, despite the overtly respectable reasons for setting up NICE, the hidden agenda at the Department of Health was to put a brake on expensive treatments and thus save money for the health service. I am partially repentant of that suspicion, but only partially. If the Department of Health was at one time secretly hopeful that NICE would reach negative verdicts on expensive treatments, by and large those hopes have been confounded. Nevertheless, NICE has been an instrument for rationing, albeit a form of rationing that is indirect, and what I mean by that will become clear in a moment.
	What surprised and disillusioned many of us shortly after NICE began its work was the augmentation of NICE's remit. When it first began, the task of NICE was to evaluate new and existing treatments for clinical effectiveness and cost effectiveness and to base its advice about best practice on those two bench-marks. In August 1999, safely into the summer Recess when most of us were by the sea, an order was laid which directed NICE to take a further factor into account; namely, the effective use of available resources. The reason that was a surprise was that up to that time the Government had insisted that decisions on the affordability of treatments, which is a question quite distinct from their cost effectiveness, would be a matter for Ministers. Those decisions require an "above the parapet" political judgment to be made—the kind of judgment that, to give him credit, Frank Dobson made on the contentious issue of Viagra. But the addition to NICE's remit suggested to many of us that questions of affordability were henceforth to be a matter for NICE itself and not for Ministers. Ministers would be able conveniently to shelter behind decisions of NICE, a supposedly independent body, and thus avoid being directly implicated in unpopular decisions where absolute cost played an important part.
	I have had no reason whatever to change my opinion on that matter. If proof were needed, I refer the House to the Minister's answer to me in a Starred Question on 5th December last year when I asked him about the bench-mark to which we now understand NICE operates when reaching its determinations; namely, a cost of £30,000 per quality adjusted life year or QALY. I asked him who set the bench-mark. The Minister said that he could not respond specifically to me because,
	"such matters are for NICE to consider in order to develop its own methodology".—[Official Report, 5/12/01; col. 830.]
	If NICE itself fixed the bench-mark of £30,000 per QALY, then that is indeed NICE making judgments on affordability. We do not know how that figure was arrived at. Ministers say that it has nothing to do with them. I find that disturbing.
	Related questions arise from the Government's recent response to the Kennedy report. Paragraph 4.8 of the response announces the Government's intention to remove the requirement that the Secretary of State and the National Assembly should approve NICE guidance before it is disseminated. I am all for NICE being and appearing independent from Ministers in the way that it reaches its conclusions, but if NICE guidance is not to be approved by the Secretary of State, who will take ultimate responsibility for the decision about affordability? Who will be accountable to Parliament for such decisions? It is not clear.
	That concern chimes in with another criticism of NICE which is its lack of transparency—a point that has been made by a number of noble Lords this evening. We do not know how topics for referral to NICE are selected. The Technologies Advisory Group makes recommendations to Ministers, but on what basis does it do so? We do not even know who the members of TAG are or how they are chosen. NICE itself is criticised by every pharmaceutical company that I have spoken to for its modus operandi. Unlike its counterpart in Scotland (the HTBS), or the Medicines Control Agency, NICE is neither open nor consultative. The result of that is that it has failed to win hearts and minds. I have heard it said that because of its reluctance to consult and communicate, NICE tends to reach its conclusions in a fog of uncertainty, with little real understanding of the subject matter and hence a wide scope for error. One example of that was glatiramer acetate, or Copaxone, a treatment for MS. When Teva, the manufacturer, took the Copaxone decision to appeal, it was only at that late stage that it learned how NICE had interpreted the manufacturer's data and carried out the resultant economic modelling. Why could not Teva have been consulted on that process? What was to be lost?
	It is that failure to win hearts and minds that worries me. If NICE has a role to play—and I believe it does—then it is essential that it carries credibility. But how can it be properly credible when other publicly funded bodies such as the Drug and Therapeutics Bulletin directly contradict what it says? That has happened more than once. How can it be properly credible when in the case of MS treatments it chose to rely on short-term data and to ignore extensive data collected from real patients over eight years of usage in the United States? What happened was that the short-term data were extrapolated by NICE and then subjected to economic modelling over 15 to 25 years—at best a highly uncertain procedure, but particularly so for a disease such as MS that develops over a long period of time.
	In assessing a treatment for its cost effectiveness, there are worries that NICE takes too narrow a view of what constitutes cost effectiveness. Many, if not most, analyses are related purely to the costs and benefits within the National Health Service. As the Wanless report has shown, no attempt is made to demonstrate wider benefits to the Exchequer and society at large. This absence of what many would regard as a common-sense approach to evaluating cost-effectiveness undermines the merits of NICE's work.
	There is another respect too in which NICE has lost credibility and is in danger of losing even more. Some of the technologies it has appraised have been well established ones, others have been less so. Unless there is a body of real life data available to NICE relating to the treatment it is considering, it is very hard to see how questions of clinical and cost effectiveness can be settled with any degree of confidence. It is certainly not enough for NICE to rely purely on data derived from clinical trials. There needs to be mature evidence. The suggestion that NICE should concentrate on assessing products at or shortly after launch is in my opinion misconceived. Its conclusions will be based on assumptions rather than evidence and, as such, will either be tentative or carry a high risk of being wrong.
	If one wants a perfect example of that point, there are few better than erythropoietin, or EPO, which is a treatment for patients with kidney failure. At the time of EPO's launch in 1990, the estimated cost per QALY was £103,000. That would have put it right out of court on the basis of NICE's current methodology. In the intervening period, the way in which EPO has been used to treat kidney failure has changed and much has been learnt from that. The cost per QALY for EPO is now estimated at between £3,000 and £9,000. If EPO had been rejected at launch, many kidney patients would have been denied a clinically effective and cost-effective treatment.
	The probability that NICE guidance will be wrong under such circumstances is dangerous when one considers the Government's proposal that such guidance should in future be binding on health authorities and PCTs. In some ways I am sympathetic to that idea. One of the troubles with NICE guidance hitherto is that it has not been taken up across the NHS. The main reason that it has not been taken up is lack of money.
	In the case of treatment for pancreatic cancer, only 34 per cent of health authorities indicated to Cancer BACUP that they had adequate funds to comply with NICE guidance. Many do not even know whether the patients in their area are being offered the approved treatment. The Government have allocated £250 million to health authorities and PCTs to support the implementation of NICE guidance. However, the way in which that money is spent is still a matter of discretion for those health service bodies. It is part of their unified allocation. In theory they can spend it in any way they like. As evidence of that, only a minority of health authorities actually have a written policy for monitoring implementation of NICE guidance, as the noble Lord, Lord Clement-Jones, mentioned. Without additional specific and earmarked funding, there can, I am afraid, be only one result from a binding direction from the Secretary of State on NICE guidance; that is, a distortion of local clinical priorities. I ask the Minister to respond particularly to that point when he replies.
	After a reasonable period of time, it makes sense to look back at the purposes for which NICE was created and to measure its subsequent performance against those original aims. Has NICE eliminated postcode prescribing in the treatments it has examined? For the reasons that I have given, it is clear that it has not. In fact, with taxanes for breast and ovarian cancer, there are now wider variations in prescribing than there were before the NICE appraisal.
	Has NICE's advice commanded a high degree of confidence in the NHS and among medical practitioners? I fear that the answer to that is, "Not high enough". Has NICE given patients faster access to proven treatments? If anything, it has hindered access. The determination process on MS treatments took more than two years and it is still not finished. The determination on the pancreatic cancer drug, Gemzar, took a year. A decision on atypical antipsychotics will have taken more than a year. In each case, by the end of the process, there will be patients who are beyond help from the treatment but who could have been helped if NICE had not intervened. Of course, in theory, doctors can prescribe licensed medicines while a NICE appraisal is going on. In practice, however—and all too often—health authorities call a halt to further prescribing, pending a NICE decision. That phenomenon is known as "NICE blight". I could quote a number of very disturbing examples of that. NICE blight is costing patients their lives.
	The NICE process, looked at in that light, gives rise to rationing, albeit of an indirect kind. Something really has to be done to ensure that the fact of a NICE appraisal does not of itself inhibit speedy access for patients to effective new treatments. As it is, both the PICTF report and the Wanless report show that the UK compares unfavourably with other countries in providing fast access to medicines. Wanless states that the UK rate is only half that of Germany and one-third that of France.
	Those are by any measure serious shortcomings in a body that in other respects performs valuable work and whose staff are, I have no doubt, committed and conscientious. I hope that the Government will have the courage to confront those issues fully. I hope that there will be an arm's length review of NICE that is both open and transparent. Reviews of that kind should be undertaken at regular intervals. Failure to do that will jeopardise the credibility that NICE must have if it is indeed to be the single authoritative voice for clinical best practice.

Lord Hunt of Kings Heath: My Lords, I, too, join noble Lords in congratulating the noble Baroness on securing a debate on an interesting topic that is vital to the future health of our National Health Service.
	In responding to the many points that have been made in the debate, it is important to start by putting the matter in context and in relation to our overall reforms of the NHS. In listening to the criticisms that have been made of NICE's performance, we should take ourselves back to 1997 and our inheritance. Our inheritance was of an NHS with an absence of national standards. There was no process for developing national guidance on the use of new treatments—I agree with the noble Earl, Lord Howe, on the importance of getting effective medicines introduced as quickly as possible—and no independent inspection of local services. Alongside the Government's determined effort to increase resources in the NHS, we have moved to put that right, to develop new standards, to introduce a new duty of quality, to have a system of clinical governance to drive up the quality of care and to have an independent inspectorate—the Commission for Health Improvement. Central to our modernisation programme is the National Institute for Clinical Excellence, which we established to give clear national guidance on the use of drugs and other treatments, as my noble friend Lady Howells aptly pointed out.
	In less than three years, NICE has done its work well and with credibility and it has been established as an integral part of our modern National Health Service. Its work undoubtedly reaches into all aspects of the NHS, from the wider judgments on whether a new treatment is clinically effective and cost effective, through to the assessment of what care is best for an individual patient.
	In listening to the criticisms that were made of NICE, it appears that some noble Lords were slow to recognise the situation in which the NHS existed before the institute was set up. The noble Lord, Lord Clement-Jones, said that few would wish to go back to pre-NICE days, and I certainly agree. The situation before NICE involved unfairness—one health authority could have a policy to fund a new treatment but a neighbouring health authority would not fund it. We had postcode prescribing—decisions about what care was best for a patient would be made on the basis of widely varying funding policies rather than on the basis of clinical need. We had a situation in which new drugs with clear evidence of clinical effectiveness and cost effectiveness were not being given to patients because it took so long for them to filter through into local prescribing policies.
	NICE exists to deal with those issues. It has made significant progress in identifying effective medicines and treatments and spreading their use quickly throughout the NHS. I was interested in the comments of the noble Baroness, Lady Knight, who suggested that one of NICE's purposes was to make savings. The noble Lord, Lord Roberts, postulated that NICE involved a delaying tactic. The noble Earl, Lord Howe, spoke about his original thoughts of a hidden agenda, although he said that he had partially repented of that.
	I want to make it absolutely clear that NICE's purpose never was, and never has been, to reduce the funding of treatments in the National Health Service. It was to speed up the introduction of clinically effective and cost-effective treatments and drugs. As the noble Earl, Lord Howe, suggested, from the figures that we have produced, we estimate that this year more than £250 million will be spent on treatments recommended by NICE. For example, NICE's appraisal of drugs to treat breast and ovarian cancer should benefit approximately 9,000 women at a cost to the NHS of £30 million. The noble Lord, Lord Clement-Jones, talked about cancer drugs. The recommendations on drugs to treat cancer of the pancreas, lungs and brain and leukaemia should benefit around 10,000 people this year at a cost to the NHS of £10 million; and so on.
	It is all very well for NICE to issue guidance, but I fully recognise that the whole thing will fall apart if we cannot ensure that the National Health Service will implement that guidance. I have always understood that point, and I understand that it lies at the very heart of the credibility of what we seek to achieve.
	At the annual conference of NICE last month, I announced that health authorities and primary care trusts have three months from the date of the issue of technology appraisal guidance to arrange for the funding of healthcare interventions recommended by the institute for patients for whom they are clinically recommended. I believe that that makes it absolutely clear that the Government expect the NHS to fund NICE guidance. I shall return to the issue of earmarking a little later. It is our belief that the extra resources put into the National Health Service both over the past few years and in the future are sufficient to ensure that locally the NHS has the funds to implement those decisions.
	I listened with great interest to some of the concerns raised by noble Lords in relation to bureaucracy. The noble Lord, Lord Addington, said that user groups had reported finding the NICE processes to be somewhat unfriendly to user and patient groups. Of course, I am anxious to listen to the comments made and to discuss them with the national institute.
	Perhaps I may make it clear that I expect NICE to have a central role in providing accessible information for patients. I believe that it has shown itself able to work with patients and their organisations: it consults patient groups at every stage; it involves patient representatives in its committees; and it actively seeks out the views of patients when developing its guidance. Of course, I am sure that it can always do better and I certainly urge it to do so. But I could not respond to this debate without saying that I believe that NICE is exercised about ensuring that patient and user groups understand the processes and have full involvement in them.
	I turn to the question of independence and openness. From its outset, I believe that NICE has enjoyed a large measure of independence from governments and, indeed, from other interests. That is why it is so important that NICE decides on its own processes for developing guidance. It is why the Department of Health has the same status as any other consultee within those processes. We contribute to the consultation process but our comments are either limited to detailed technical or clinical issues or they seek to clarify aspects of the draft guidance. It is because of its independence in making judgments that, very often, I cannot answer direct questions posed by noble Lords in this House while a NICE examination is taking place into, for example, a particular drug. The noble Lord, Lord Roberts, has raised the issue of drugs on a number of occasions in this House.
	In our recently published response to the Kennedy report, we announced that we wish to build on the independence that NICE already has. We propose to remove the requirement for approval to be given by the Secretary of State for Health and the National Assembly for Wales for disseminating NICE guidance. We also intend to lay before Parliament changes to NICE's regulations in order to enable NICE to determine its own appraisal committee structure and to appoint members to that committee structure without reference to the Secretary of State or the National Assembly for Wales.
	We also accept, and will be making clearer and more explicit, the ways in which NICE, other NHS professional and patient bodies, and individual professionals can contribute to developing NICE's agenda. I can assure noble Lords that we shall shortly issue a consultation paper suggesting a number of changes to the existing arrangements and seeking further comments.
	One or two comments were made in relation to beta interferon. That drug is still the subject of a process within NICE. But the noble Baroness, Lady Knight, asked me about the discussion that the Department of Health has had, and is having, with manufacturers of the drug and other interested parties to see whether any of the four medicines can be secured for the NHS in a manner which could be considered cost-effective. That is not an attempt by the department to second-guess NICE or to interfere in the process. I refer to the view given by NICE in its provisional appraisal that those drugs did not represent a cost-effective use of NHS resources. At the same time, NICE recommended that discussions take place between the department and the manufacturers in order to secure supplies for the NHS on terms that could be regarded as cost-effective. That is why we are engaged in those discussions.
	A number of very interesting points were made about the methodology of NICE. The noble Lord, Lord Clement-Jones, raised the issue of rare diseases and orphan drugs. In general, NICE has made it clear—this is its responsibility—that it is not tied to any particular methodology but will consider the special features of each appraisal on their merits. Obviously it must make complex judgments based on a number of different factors and then take into account all the available evidence.
	We then moved on to the question of quality adjusted life years, or QALYs. I am disappointed that the right reverend Prelate is not here to respond to the noble Baroness and her criticisms, if I may say so, of a lack of consistency on the part of doctrine in the Church of England. I believe that when it comes to methodology in terms of judgments, it is clear that NICE will use different methodologies and seek always to find the best evidence available. QALYs are a method of taking a measure of health status which combines judgments about increased life expectancy and improved quality of life. The purpose of the QALY measure is to allow the health gain from different interventions to be compared. With information on the cost of interventions their value for money performance can then be compared using a common yardstick.
	I do not seek to deny that there are criticisms of QALYs and that they are contentious. Indeed, I take on board the point which the noble Baroness, Lady Knight, has made about older people and the question whether QALYs might put older people at a disadvantage. I accept that there is a great deal of debate about QALYs and their use and that it is a methodology which is still under development. But it is a way in which to compare the health effects of different interventions which change life expectancy and the quality of life. It can be a useful mechanism to be used by NICE alongside other judgments.
	The noble Earl, Lord Howe, raised the issue of whether it is right for NICE to have to take into account issues of cost effectiveness as well as clinical effectiveness. I believe it is right that it makes technical judgments on the clinical and cost effectiveness of drugs and treatments. I believe that from its perspective it is able to make those kinds of judgments. But I also believe that it is important that NICE guidance is issued direct to the NHS without being filtered or changed in any way.

Lord Roberts of Conwy: My Lords, I am most grateful to the noble Lord for giving way. Can he tell us whether NICE, in assessing the cost effectiveness of drugs and treatments, can take into account factors outside the NHS such as employment, the loss of it, benefit costs and so on?

Lord Hunt of Kings Heath: My Lords, in broad terms it can. I was going to respond to the noble Lord later on that point. The point I am trying to make here, in answering the noble Earl, Lord Howe, is that I believe it is right that NICE makes judgments about cost effectiveness alongside clinical effectiveness, but Ministers are ultimately responsible for the affordability of NICE guidance. It is our responsibility to ensure that the National Health Service has the resources for that guidance. I believe that we are providing the level of resources to enable that to happen. I do not agree with the noble Earl that we should earmark those resources. In fact, I am always influenced by the noble Earl's strictures about too much central direction. In this case it is within the general allocations.

Lord Clement-Jones: My Lords, since this is such a crucial question and there are different interpretations of NICE'S remit, can the Minister absolutely and categorically say that no NICE appraisal has taken into account affordability?

Lord Hunt of Kings Heath: My Lords, the issue for NICE is judgments on cost and clinical effectiveness. The issue for Ministers is affordability. I believe that I have made it abundantly clear that there are respective responsibilities and it is quite clear as to who is responsible for what.
	The noble Earl, Lord Howe, asked about criticisms of individual judgments and errors. I believe that it is unrealistic to believe that all expert opinions will always agree with NICE guidance because, at the end of the day, NICE will often have to make a fine judgment weighing up a range of evidence and opinions. But I believe that the experience so far has been that overall its judgments are robust because it seeks out all the available evidence and draws on the top experts in the field as well as on patient and carer evidence.
	The noble Lord, Lord Roberts, and the noble Lord, Lord Addington, asked about the considerations that NICE can take into account. The appraisals that it carries out are done in accordance with its framework document. That document states that its task is to assess the evidence of all the clinical and health-related benefits of an intervention, taking this in a wide sense, to include impact on quality of life, relief of pain or disability as well as any impact on likely length of life; to estimate the associated costs and to reach a judgment on whether on balance this intervention can be recommended as a cost effective use of NHS and personal social service resources. I hope that answers the question and makes clear that NICE can take into account those wider considerations.

Lord Addington: My Lords, the only real point in raising the matter is that we hear about joined-up government and we have heard today about how the health department is borrowing from one part of it to meet a deficit in another. I was merely suggesting that we expand the suggestion so that another department helps in the National Health Service because such drug treatment may help people to stay in employment and keep off benefits.

Lord Hunt of Kings Heath: My Lords, I am always anxious to grab more resources from other government departments. I am unlikely to get much support for that across Whitehall. Of course I understand the point that the noble Lord raises. I believe that at the moment we have a sensible balance, which essentially allows NICE to take into account the wider considerations. But the balance on cost effectiveness is based on the use of NHS and PSS resources.
	Obviously, these matters will continue to be debated. That brings me to the point made by the noble Lord, Lord Clement-Jones, about a review of NICE. We consider that the effect of our response to the Kennedy report, the publication shortly of a consultation document which will cover the detail of the process of topic selection, and our consideration of the inquiry by the Health Select Committee into NICE will provide a very helpful and comprehensive look at many of the current issues that face the national institute.
	Indeed, considering our response to the Kennedy report brings me to another point raised by the noble Lord, Lord Colwyn, who always has many interesting insights into dentistry. He knows of my own keenness to ensure that the dental profession further develops its excellent quality and expands its services to the public.
	He raised a concern that in a sense NICE might be given a monopoly for setting all national clinical standards. It was the recommendation of the Kennedy inquiry that NICE should be responsible for co-ordinating all action relating to the setting, issuing and keeping under review of national clinical standards. We rejected that view because while we believe that NICE is the foremost body to provide authoritative clinical guidelines and appraisals, there are many other bodies which are best placed to set standards in their fields. We would not wish to inhibit their excellent role in doing so.
	The noble Lord, Lord Astor of Hever, asked a number of questions and in particular about the establishment of a council for quality. Its role would be to facilitate co-operative working between constituent organisations including NICE, CHI, the Clinical Assessment Agency and the National Patients Safety Agency. It would also help those bodies to work closely together with the Social Services Inspectorate, the Audit Commission and others. I accept that there is a need to co-ordinate. We want to avoid duplication and too much inspection in relation to individual organisations where a co-ordinated approach is likely to be much more effective.
	As regards the other points raised by the noble Lord about public health, I do not believe that the Government are failing in those areas. I believe that our public health strategy, our strategy to tackle health inequalities, the consultative paper on sexual health strategy and the recent CMO's report on public health surveillance show that we are taking these matters very seriously. Of course, I share the noble Lord's concern about the low uptake of MMR, particularly in London, but also in other parts of the country. I believe that we have a massive job to do to restore public confidence in these vaccines.
	I also believe that at the local level it is important to have a strong public health function. In response to the worries in relation to the BMA, we have made it abundantly clear that every primary care trust will appoint a director of public health. There will be a senior public health doctor at the strategic health authority level. I believe that making the primary care trust the primary public health body at local level will help to ensure a much closer relationship between public health and primary care. I believe that that is where we can tackle the issue of the low uptake of vaccination in a more effective way in the future.
	The noble Lord, Lord Roberts, will know that the particular drugs that he mentioned are the subject of work being carried out by NICE at the moment. Taken as a whole, it is much better to have a situation where such drugs are properly assessed rather than leaving that to the ravages of postcode prescribing, which he so aptly described.
	I also listened to the remarks about "NICE blight". I want to make it abundantly clear that it is unacceptable that health authorities should decide that a treatment should be prescribed while awaiting an appraisal of that treatment. I believe that Health Service Circular 1999/176 is clear about that. If health authorities are seen to make arbitrary judgments outwith the terms of that circular, I have made it clear that any complaint that is received will be investigated.
	I have spoken at length but I believe that it is important to answer many of the points that have been raised in this important debate. I can reassure the noble Earl, Lord Howe, that of course we listen to comments made. They are taken into account in regular discussions with the National Institute for Clinical Excellence. However, at the end of the day I believe that NICE has established robust mechanisms and that it is helping to ensure quicker update of new treatments, new technologies and new drugs. I also believe that that is the way forward. It will enable the NHS to ensure that, overall, patients will receive effective treatments quickly, and that is the NHS that we wish to achieve for the future.

Baroness Knight of Collingtree: My Lords, we have had an interesting and well-informed debate. I warmly thank noble Lords who have taken part, particularly my noble friend Lord Colwyn. It is always a great pleasure to hear from experts who speak about their own field of expertise. I listened to him with enormous interest.
	My noble friend Lord Roberts told of his experience from a more personal angle, but his speech was also important. We have heard clear expressions of concern. The noble Lord, Lord Clement-Jones, gave a trenchant speech, pointing out many areas of concern, and my noble friend Lord Howe made some important points that must be borne in mind all the time.
	I am grateful that the Minister took on board the fact that unless NICE is respected, and unless the public feel that it is a body that is of real service, it will not be of much use. The noble Baroness, Lady Howells, for whom I have a warm regard, gave a statutory few moments of support for NICE, which we were all pleased to hear.
	I wish I could feel more gratitude to the Minister, but questions were raised in the debate that he has not answered. Perhaps he would kindly read the speeches made and answer directly some of the clear questions that were put. He tried to answer one or two. Having said that the point was not to make savings, later he said much about being cost-effective. To me being cost-effective is allied to making savings. I listened carefully to what the Minister said, but when he said that the Government will fund the recommendations of NICE, did he mean that there will be other areas of treatment that will suffer because the money will go to the treatments that have been recommended by NICE? We do not know. We have had an interesting and helpful debate. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Disability Discrimination (Amendment) Bill [HL]

Lord Ashley of Stoke: My Lords, I beg to move that this Bill be now read a second time. Despite the Disability Discrimination Act, discrimination is still rife against Britain's disabled people. This Bill seeks to transform the legislation into a package of genuinely comprehensive and enforceable civil rights.
	Its message is that discrimination in any area will no longer be tolerated. It is time for it to go and we want urgent government action, complete with a timetable. Despite the legislative advances made since the admirable Chronically Sick and Disabled Persons Act, initiated by my noble friend Lord Morris of Manchester in 1970, vast numbers of disabled people are still excluded from the protection of the Disability Discrimination Act. Much of transport is excluded, and so too are private clubs. Tribunals lack the powers to be able to dispense justice for disabled employees and the Disability Rights Commission needs to be able to take proceedings on behalf of disabled people under the Human Rights Act.
	All these serious and significant shortcomings are addressed in my Bill. When I was preparing it, I had very much in mind the recommendations of the Disability Rights Task Force and the Government's response in Towards Inclusion. But we now want government action rather than words on the recommendations of the task force.
	Many disability organisations strongly support the Bill and the Disability Rights Commission has called publicly for the changes that it proposes. I greatly appreciate the help that I have received from the commission in preparing my Bill. It prepared an excellent briefing for noble Lords. I am also grateful for the help that I have received from RADAR and the Public Bill Office.
	Of course, I am aware that some of the proposals in the Bill can be implemented by regulations. But a unified, focused approach, as in this Bill, is preferable to a piecemeal one. The elements all hang together, affecting the lives and the happiness of many disabled people.
	In a debate on the need for a new disability Bill on 8th November last year, the Minister was sympathetic, but reserved. That is an understandable posture for a cautious Minister, but it is not good enough. This Government deserve credit for some measures on disability, such as the Disability Rights Commission Act, the Special Educational Needs and Disability Act, the Disability Discrimination Act and the Carers Act, but they have failed to keep their categoric promise in their 1997 manifesto of "comprehensive and enforceable rights" for disabled people and they are not moving fast enough on most of the task force recommendations. It is time to get a move on as disabled people cannot wait indefinitely.
	Now a word of explanation about the Bill's clauses. Clause 1 deals with the problem that people with progressive conditions can suffer discrimination well before they have symptoms. Yet the DDA does not cover a person until symptoms have emerged, which is preposterous. So Clause 1 ensures, for example, that HIV is included from the point of diagnosis, and that cancer patients are included from the point at which significant treatment is required.
	Clause 2 includes private clubs in Part III of the Disability Discrimination Act, which relates to goods, facilities and services. This will help prevent discrimination in applications for membership and, specifically, in terms of membership. Let us take the following example. A British Legion branch is citing the DDA's exemption for private clubs in its shocking decision to bar a long-standing and active member from attending with an assistance dog. This lady has been a member for 10 years, and was recently elected branch secretary of the Royal Air Forces Association. When people can behave in that manner and use the DDA in order to defend such an indefensible posture, it seems to me that it is time for this Act to be changed and improved.
	Clause 3 addresses the problem of some important rights for disabled people that are established not by the DDA but by the Human Rights Act. These include the right that no one should be deprived of life intentionally or be subjected to inhuman or degrading treatment. Perhaps I may give the House an example. A company director with spinal muscular atrophy, a qualified solicitor, was admitted to hospital with a chest infection. To her horror, she found that a doctor had placed a "Do Not Resuscitate" notice on her medical notes because it was considered that her quality of life did not warrant such intervention. Do not noble Lords find that quite incredible? Nevertheless, it is what actually happened. As yet, there is no commission to enforce the Human Rights Act. The power to represent such people should, therefore, be given to the Disability Rights Commission, along with the Equal Rights Commission and the Commission for Racial Equality. Indeed, it should be done without delay.
	Clause 4 extends the cover of the DDA to the police, prison officers, fire fighters and the Armed Forces. There is no valid reason why they should not have been included in the first place. While including them in this Bill, we can ensure that, for the Armed Forces in particular, there should be nothing to interfere with their operational effectiveness.
	Clause 5 would ensure that all firms were covered under the DDA. I think, as I have always thought, that it is ludicrous that 382,000 disabled employees are without protection from even the most blatant forms of discrimination. The Act provides for 92.5 per cent of employers a continuing legal licence to discriminate. It is a funny old piece of legislation: it does not really protect people because of these absurd exemptions. The original Act included only firms with 20 or more workers. The Labour Government's change to firms with 15 or more workers was helpful, but insufficient. It merely brought in 70,000 employees, whereas this Bill will bring in 382,000. Nor is the Government's decision to include all firms by 2004 acceptable. There is absolutely no need for delay because including these firms now simply means that they should not discriminate; that is all. It asks them not to discriminate against their disabled employees and to take "reasonable" steps to accommodate them. Therefore, no unreasonable demands would be made on any firm. So why not get on with it, and bring in all these firms under the legislation pronto? The size of the firm should be irrelevant.
	Clause 6 would give employment tribunals power to order reinstatement of an employee who had suffered discrimination. At present, they can only order reinstatement for cases of unfair dismissal. Clause 7 removes the short clauses in the DDA that exclude transport. It is absurd that transport was mainly excluded in the first place. Transport is currently an enormous hole in the provision. Accessible jobs and services are useless if inaccessible travel prevents disabled people from getting to them. As my noble friends will confirm, that is often the case.
	Clause 8 seeks to ensure that the vast majority of public authorities are forbidden to discriminate against disabled people. Obviously, we need to exclude the Security Service, Government Communications Headquarters, and any judicial bodies making decisions such as not to institute criminal proceedings and related actions. These would mirror the Race Relations (Amendment) Act exclusions.
	Clause 9 is based on the belief that it is inappropriate to leave responsibility for change on such vital issues to disabled individuals protesting and establishing case law because it would take far too long. It is unfair to leave it to them. The clause places a duty on the public sector to promote equality of opportunity for disabled people. It also gives the Secretary of State power to specify appropriate duties. If anyone fails to do so, the Minister can issue a compliance order, which is very necessary. This clause would speed up understanding and awareness of disability rights.
	Clauses 10, 11 and 12 are linked. They ensure that the duties in Part III of the DDA are extended to landlords. There is evidence of landlords withholding consent for disabled people to make much needed changes to property, such as installing a stairlift. It beats me why they should have the power to veto improvements that are vitally necessary for disabled people. This Bill would certainly deal with that anomaly.
	The background to Clause 13 is that the DDA has already established a questionnaire procedure for discrimination in employment claims which enables applicants to assess from employers' responses whether or not they have a case. It is a very valuable questionnaire that can clarify the strength of a potential claim and prompt an early resolution—something that we all want. The clause would extend this provision to the goods and services sections of the Act.
	Clause 14 ensures that all goods and services discrimination cases under the DDA are commenced in an employment tribunal. The Disability Rights Commission quotes research by Income Data Services showing that the number of cases alleging discrimination regarding goods, facilities, services and premises brought before the county court in the first four years of operation was very small—only some 50 odd—compared with the thousands of claims to employment tribunals. I have seen an estimate of some 11,000, which, when compared with 50, speaks volumes because people are equally discriminated against in the provision of services. The reason for that difference is that, unlike county courts, tribunals do not charge fees. They are flexible and informal, and they do not frighten and deter disabled claimants.
	I have reached the end of my speech. I hope that the Government will support and assist the Bill's progress. What we really need are specific dates for action. I am, of course, willing to consider any amendments. If I can help my noble friend in any possible way, I shall be only too glad to do so. If the Government can give a guarantee of some kind to introduce their own Bill on similar lines, it would provide significant reassurance to my noble friends, to the many disability organisations, and to me. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Ashley of Stoke.)

Lord Swinfen: My Lords, the whole House will be very pleased that the noble Lord, Lord Ashley, has explained his Bill in such a clear way. I am sure that all noble Lords will extend a warm welcome to the Bill. The noble Lord is now, and has been for many years, a tireless fighter on behalf of people with disabilities. This is but another action in his long campaign.
	As the noble Lord said, the Bill is designed to put into effect the recommendations of the task force established by the Government in its report of December 1999 entitled, From Exclusion to Inclusion. We should all remember that this Bill, as well as benefiting disabled people today, could in the future benefit those of us who are not disabled, as there is always the chance that we ourselves could become disabled.
	I particularly welcome Clause 2 which prohibits discrimination by associations. That will bring disability legislation into line with the laws on both racial and sexual discrimination. Why should private clubs be exempt from the general law?
	The House knows that when the Conservatives were last in power I was often a thorn in the flesh of our Front Bench on disability matters. For over 20 years I have fought in this House for disabled people.
	I have serious doubts about Clause 4 as it affects the Armed Forces. I speak as someone who was at one time a regular soldier. The Armed Forces already do their best to keep employed servicemen and servicewomen who become disabled. But it is not in my view practical to recruit disabled people. All service people, whatever their task and wherever their service, must be able to fight. A disabled recruit, unlike an able-bodied recruit, cannot acquire the experience or training that would enable him to effectively assist his colleagues in the way that an able-bodied person could who later suffered a disabling injury. I say sorry to the noble Lord, Lord Ashley, whom I greatly respect, but I cannot support him on that particular point.
	I do not have experience of the police or of fire fighters. Therefore, I shall not comment on them. However, I wonder whether some of the points that I have made about the Armed Forces may apply also to them. The matter needs to be carefully looked at.
	I very much welcome Clause 5—the extension of the Disability Discrimination Act to small employers. I welcome the fact that the Government have already reduced the threshold from 20 to 15 employees. I, along with others, tried unsuccessfully to have this new proposed lower limit written into the original Disability Discrimination Act when it was a Bill passing through this House. The noble Baroness, Lady Hollis of Heigham, will recall that point because we worked together on it at the time.
	Clause 7 of the Bill brings transport within the remit of the Disability Discrimination Act. I welcome that. For example, why should a bus driver who is possibly late be allowed to refuse a disabled person from boarding his bus just because he would take longer to get on board than someone more active?
	Clause 9 provides a general duty to promote equal opportunities for disabled people. It is to be welcomed. In the long run, it will lead to a general improvement in our society of the position of people with disabilities.
	Clauses 11 and 12 deal with rented property. They may need to be looked at in Committee to ensure that they work properly because I can see that there are likely to be certain difficulties. On the whole, I welcome the idea behind the clauses.
	I do not need to say a great deal more. Generally, I welcome the Bill, but with the exceptions that I have mentioned. I trust that the Government and the usual channels will help it to have a speedy passage through this House. I look forward with great interest to its Committee stage.

Lord Rix: My Lords, first, I must declare my long-standing interest in the world of learning disability as president of Mencap. We are all grateful to the noble Lord, Lord Ashley of Stoke, for giving us a further opportunity to fine tune the 1995 Disability Discrimination Act. I know that he will have many allies, for your Lordships are among the foremost advocates for disabled people and none more so than the noble Lord, Lord Ashley, himself.
	We have come a long way, particularly in the world of learning disability, since our Down's Syndrome daughter was born some 50 years ago. The first improvements surfaced in 1971, with the White Paper, Better Services for the Mentally Handicapped, and with the enactment of the Education (Handicapped Children) Act 1970, which included children with severe learning disabilities in the education system for the first time. It was at that time too that the noble Lord, Lord Morris of Manchester, as we have heard, was piloting his Private Member's Bill through another place—eventually the Chronically Sick and Disabled Persons Act. All these ground-breaking achievements—for they were ground-breaking achievements, believe me—came only a year or two after the population of the old "subnormality hospitals" had peaked, with the appalling number of 70,000 men, women and children still virtually incarcerated and cut off from all normal communication with the outside world.
	Today, there are still about 1,500 people with a learning disability in English hospitals. Hopefully, they are living under greatly changed circumstances, while those still alive from that peak figure of 70,000 have become part of the care-in-the-community population, to the great enjoyment of the majority of them.
	Successive governments deserve great credit for their policies on disability. Our current rulers are, I am glad to say, no exception. There is a vast range of legislation for which we are all very grateful. All have, with various degrees of enthusiasm, vigorously promoted the interests of disabled people over the years. I congratulate them warmly on so doing.
	However, there is still a long way to go before disabled people gain equal rights and opportunities in all areas of life. The noble Lord, Lord Ashley, has already highlighted the need for further progress and I wholeheartedly support his Bill.
	The first of my concerns is the thorny issue of employment and the exclusion of small employers from the DDA. While I recognise the Government's wish to carry these small employers with them, giving them time to understand in full the meaning of the DDA, I must remind your Lordships how pitifully few people with a learning disability are afforded full employment, or employment that is anything other than token, and many of the smaller employers would never consider employing them anyway. Other disabilities, well, maybe; learning disability, frankly, no. Yet the Government have set a target for the employment of learning disabled people in their recent, excellent White Paper, Valuing People, of 30 per cent in order to achieve parity with other disabled persons. They will never achieve that figure unless smaller employers join the ranks of the already proactive big boys—the Marks and Spencer's, the Sainsbury's, the Tesco's et al—in realising the potential of people who until recently were probably considered to be hopeless basket cases.
	Even when disabled people secure jobs, therefore enhancing their independence, there is no guarantee that they will be able to travel to those jobs. In recent years we have seen many improvements in public transport. We have to thank the Disabled Persons Transport Advisory Committee for these improvements, but unnecessary problems still abound.
	Twenty years ago, while working with the BBC, I presented the programme "Let's Go" for people with a learning disability. It is an interesting fact that one of these programmes highlighted transport issues and mobility training. Twenty years later, we still do not have accessibility for the majority of disabled people right. That can be rectified only by the omission of Section 19(5)(b) from the DDA.
	Although physical access is a major issue for disabled people, people with a learning disability experience discrimination on a different scale. In Mencap's recent report on bullying, people with a learning disability stated that they were regular victims of bullying while using transport, often by groups of fellow passengers. Many felt isolated and trapped in an enclosed environment. Unfortunately, the bullying was not just by members of the public but by transport staff. People with a learning disability reported that bus drivers often harassed them, so much that many were forced to leave the bus.
	Clause 7 of the Bill introduced by the noble Lord, Lord Ashley of Stoke, is much needed. It will not only greatly enhance the ability of disabled people to travel throughout the United Kingdom but will remove the somewhat anomalous situation in which rail and bus stations must provide access while transport itself is not covered by the DDA. I do not believe that access to training will impose great costs that threaten our already beleaguered transport service.
	Like the noble Lord, Lord Swinfen, I welcome Clause 2 of the Bill, which takes away the right of any association—public or private, small or large—to discriminate against disabled people. The noble Lord cited the British Legion as an example of the DDA being used unfairly. I shall add a further illustration. Last year, a number of parents of children with a learning disability wrote to Mencap expressing their concerns about the withdrawal of riding lessons for their children by the Riding for the Disabled Association. The children are between eight and nine years old. Some have profound learning difficulties and some have additional physical disabilities. Horse riding has been a valuable activity for them.
	I respect enormously the achievements of the RDA, and I do not want to demand the impossible, but the rationale given for the withdrawal of the service was that staff were having difficulties lifting the riders onto the ponies. There were no male volunteers to help with lifting, and there was no hoist available. Some of the children in question weigh well under six stone. Although some are profoundly disabled, they were never unruly in the saddle. Even so, there was little that parents could do about it, for the DDA excludes membership organisations that provide social, cultural and recreational activities, such as the Riding for the Disabled Association and, of course, the Scout Association. That goes against the spirit of the Government's policy of integration and inclusion of disabled people in recreational and leisure facilities. Once again, the noble Lord, Lord Ashley of Stoke, is on the side of the angels.
	Whether we like it or not, we live in a doctrinaire age. A number of interested parties are determined on change for change's sake. In this case, I argue strongly that change is needed sooner, rather than later, to ensure that disabled people have the rights and opportunities that the rest of us take for granted. I would welcome a reassurance from the Government that, if the Bill does not gain parliamentary time, they will introduce a comprehensive new disability Bill in the next Queen's Speech. I hope that we can set an example that will be a beacon to all other countries and will further tackle widespread discrimination, enabling even more disabled people to live fuller and happier lives.
	In 1941, Franklin D. Roosevelt, the severely disabled President of the United States, proclaimed the four essential human freedoms: freedom of speech, freedom of religion, freedom from want and freedom from fear. He might well have added a fifth: freedom from discrimination. The Bill introduced by the noble Lord, Lord Ashley of Stoke, is one further step in granting that freedom. I wish it well.

Baroness Wilkins: My Lords, I strongly support the Bill. My education in the necessity of civil rights legislation to create equal opportunities for disabled people began over 20 years ago with a television documentary called "We won't go away", which I made with Patricia Ingram. The documentary was an exciting revelation to us here in Britain, showing the integrated schools, accessible buses and subway trains, signed TV and other wonders that had resulted from America's first civil rights legislation for disabled people. That was Section 504 of the Rehabilitation Act 1973, passed nearly 30 years ago. Since then, the Americans have built a comprehensive body of anti-discrimation law on those initial foundations, most notably with the Americans with Disabilities Act 1990.
	I am delighted to say that my noble friend Lord Ashley of Stoke has the same staying power as the title of our documentary. Fortunately, he won't go away either. He has been a tireless advocate, and this is one of his many Private Member's Bills promoting the civil rights of disabled people. I support the Bill wholeheartedly.
	As the Minister will no doubt be reminded many times during discussion of the Bill, the Government made a manifesto commitment in 1997 to ensure full civil rights for disabled people. To that end, I hope that the Minister will be able to give the Bill her invaluable support. The Bill would take us well down the road from our partial civil rights legislation towards the full and enforceable civil rights provisions pledged by the Government. The Bill is doubly effective. It identifies and fills many of the loopholes in the Disability Discrimination Act 1995, and it takes a new, more proactive approach to equality for disabled people that would make it easier for us to access and enforce our rights.
	I shall briefly mention the main loopholes that my noble friend's Bill identifies. Our current legislation falls far short of full civil rights for disabled people in key areas of life where discrimination continues to be sanctioned by the law. The most glaring of those, as noble Lords have said, are in employment, housing and transport. I support the clauses that seek to address those shortcomings.
	Clauses 4 and 5 would end the current employment exemptions and bring small employers, police officers, fire fighters and the Armed Forces within the DDA. The Government have agreed in principle to end those exemptions, apart from the Armed Forces, so why should we not grasp the nettle and act now? No employer is asked to recruit or retain people unable to carry out the job required or to make unreasonable adjustments. If disabled people are not to continue pointlessly being barred from the Government's policy of providing work for those who can, the Minister must support those clauses.
	I particularly welcome Clause 7, which would bring transport operators under Part III of the DDA. The current exclusion has meant that people continue to experience discrimination in ways that non-disabled people would be shocked to hear about. MIND has reported to me the case of a woman who declared her diagnosis of schizophrenia when she booked a coach ticket, explaining her need to sit at the front. She was sold the ticket on that basis, but when she tried to take her seat and explained her reason to the driver she was told to get off the bus. Another instance involved deaf passengers on a train who were denied service at the canteen because the attendant was too impatient to communicate on paper.
	Clauses 10 to 12, which would apply duties to make reasonable adjustments in housing, are also extremely welcome. The lack of accessible housing is a major difficulty for physically disabled people, and it is one of the major hurdles in pursuing job opportunities. Under the Bill, a landlord could not withhold consent unreasonably if a disabled person needed to make physical alterations to the premises. It would also mean that basic forms of discrimination such as guide dog bans could be challenged more effectively.
	As I said, the Bill not only addresses loopholes in the current law but tackles no fewer than five of the key barriers to access to justice for disabled people and the effective enforcement of our civil rights. Having rights by law will have little practical impact unless there is an easy and effective means of enforcing them. The clauses would give the Disability Rights Commission the power to assist disabled people under the Human Rights Act 1998; introduce positive duties on public authorities; and enable Part III cases to be commenced in tribunals. I shall resist the temptation to expand on those parts of the Bill but will give them my full support during the passage of the Bill.
	I turn to the definition of disability, which is one of the major deficiencies in the current law. Many disabled people have discovered that they are excluded from its protection. Indeed, the DRC has found that one in four—a quarter—of the cases of alleged discrimination, fall at the first hurdle.
	I strongly support Clause 1 of the Bill which calls for the extension of DDA protection to those with cancer and HIV from the point of diagnosis. However, the Bill does not go far enough. I hope that the Government are willing to consider amendments during progress of the Bill to extend the definition of disability in order to ensure that people with mental health problems and blind or partially sighted people are also given protection against discrimination.
	Despite being registered as blind or partially sighted, visually impaired people have often had problems establishing that they are covered by the DDA. That is either because they have developed coping mechanisms, or because tribunals have failed to apply the guidance correctly.
	The matter of definition was one of the most complex issues facing the Disability Rights Task Force and one which it acknowledged needed further work. Case law has already provided evidence that people with mental health problems are particularly ill served by the Act's current definition of disability.
	First, they have to prove that their condition is clinically well recognised. That is not required for someone with a physical condition, even though diagnosis can often be just as difficult—as in the case of ME.
	Secondly, the claimant must show,
	"a mental impairment which has a substantial adverse effect on normal day to day activities".
	However, the list of activities is focused principally on physical impairment. It contains six physical activities and only two mental ones. In most cases the only relevant activity for people with mental health problems is, "inability to concentrate".
	As the task force acknowledges in its report, since "normal day to day activities" does not cover impairments of "thinking, feeling, or social interaction", it may not serve people with mental health problems well. In a recent unpublished survey of decided cases at employment tribunals, the DRC found that the definition caused more problems for people with mental health conditions than for any other group.
	There have been numbers of cases where employees with depression have failed to satisfy the definition—either because the period was shorter than 12 months, or because they failed to convince the tribunal that their ability to concentrate was impaired. Out of a total of 210 cases in which the employment tribunal found against the applicant, around a quarter were mental health cases. Of these 210 cases, 67 were criticised as being unfair.
	The issue of definition of disability needs much further consideration and I hope to return with amendments at Committee stage of the Bill.
	Since coming to power the Government have done much to further the civil rights of disabled people with the creation of the Disability Rights Commission, the setting up of the Disability Rights Task Force and the passage of the Special Educational Needs and Disability Act. However, there is still a long way to go before they fulfil their pledge of full and enforceable civil rights for disabled people.
	I hope that the Government maintain the momentum of the past few years and demonstrate that the civil rights of disabled people are high on their agenda by supporting the Bill. By now, the Minister must be only too aware that, as the demonstration placard said of disabled in that documentary all those years ago, "We won't go away".

Baroness Darcy de Knayth: My Lords, I would like to congratulate the noble Lord, Lord Ashley of Stoke, on bringing forward this excellent Bill which will be welcomed by all disabled people and by all who campaign for a genuinely inclusive society.
	The noble Lord gave a wonderfully clear and comprehensive introduction, and I would like to concentrate on one or two of the measures it introduces which I feel are essential improvements to the 1995 Act.
	First, I am delighted that the definition of disability should be widened to include people who have been diagnosed as HIV positive or who have cancer likely to require substantial treatment. The mere mention of either of those conditions sometimes leads to panic discriminatory measures long before the people concerned can qualify as disabled people under the Act. That leads to unacceptable injustices.
	The same is true of people with a mental health problem, and I very much hope that it will be possible to expand the definition of disability to cover more effectively the hundreds who now face discrimination on account of a mental health problem. The noble Baroness, Lady Wilkins, has already spoken of this and I know that the noble Lord, Lord Bragg, will speak in much more detail and with much more expertise.
	However, it seems that Australia, Canada and now Ireland have arrived at a definition which has been tried and tested and works and that no floodgates have been opened, as people always fear. Therefore, I would wholeheartedly support any amendment which may be brought forward in Committee to end the discrimination. I believe that the statistics on discrimination against people with a mental health problem are horrific.
	I very much welcome Clause 4, which will make it illegal to discriminate against disabled people in relation to employment in the police forces, the fire services and the Armed Forces. I fear that those who argue that discrimination against disabled people is essential if those important services are to function properly are being misled by watching too many Rambo-style police and special forces television programmes and films.
	I heard what the noble Lord, Lord Swinfen, said and I stress that I am certainly not referring to him. He spoke with experience, but I am talking generally about people. Surely there are many non-combative jobs that people in the Army can do.
	As the noble Baroness, Lady Wilkins, has already said in what I thought was an excellent speech, there are numerous jobs in all these services which many disabled people could do effectively with or without reasonable adjustments. I have never heard anyone advocate that those services must employ disabled people to do the jobs for which their disabilities make them justifiably unsuitable.
	Unfortunately, however, the existence of some jobs requiring high degrees of physical ability is used to justify banning disabled people from every job. As the noble Lord, Lord Swinfen, said, some of those services already keep employees who have been disabled in the course of their work. That shows that the opportunities are there in the forces and yet, surprisingly at present, the employers would be entirely justified in refusing employment to others with identical disabilities in identical jobs who were not already in their employ.
	I am delighted that Clause 5 of the Bill will abolish any exemptions, no matter how many employees a firm might employ. I find it very difficult to justify any number when it comes to discrimination. I found it difficult in 1995 and I found it even more difficult in 1999. Therefore, this is a most welcome measure.
	However, despite the proviso of reasonable adjustments, I can foresee difficulties that might arise because of human nature and a conflict of personalities in small two or three-person businesses. It could be made difficult, but rather than exempt such firms on those grounds, might it not be possible to arrange added safeguards to protect the interests of those employing one or two people against malicious prosecutions?
	The RNIB would like to bring voluntary work and work placements fully within Part 2 of the DDA, and I totally agree. I tried hard, in conjunction with SKILL, of which I am the president, to get work placements covered during the passage of the Special Educational Needs and Disability Act.
	The further education and higher education institutions will be responsible for the accessibility of courses, including work placements, but they do not fully cover students on work experience against discrimination in the workplace. We really must do something about that. Work experience is becoming an increasingly central element of the curriculum in secondary education, as well as in FE and HE.
	To ensure that disabled learners have access to the same opportunities as their non-disabled peers must be a priority for the Government—a government who place such strong emphasis on boosting the employability and employment of disabled people. Yet disabled learners on work placements and disabled volunteers are denied the protection of the DDA in the workplace unless they are paid.
	Employers are not required by law to make any kind of reasonable adjustments for them. I hope that we can find some way of removing the disincentives to employers against giving work placements to disabled students. The task force stated that a code of practice should be developed to cover volunteers and that if necessary a reserve power should be taken to include them in the DDA. The question of work placements was not even addressed.
	When she comes to reply, can the noble Baroness, Lady Hollis, detail what steps are being taken to develop the code of practice? Can the DRC be asked to consult as regards what form DDA protection for disabled volunteers and students on work experience should take? What systems of support need to be put in place to protect and encourage such students? I have not given notice of this question so I shall be content if the noble Baroness replies to me in writing.
	Another remedial measure that I wholeheartedly support is Clause 7, which excludes transport from the effects of measures covered by Part III of the Act. Surely it is totally illogical to allow discrimination in respect of goods and services provided on trains and buses whose accessibility has been prescribed under Part V of the Act. It has led to some gross injustices, in particular in respect of blind people. Transport is an issue particularly close to my heart because I am a member of the Joint Committee on Mobility for Disabled People. Furthermore, it is a subject which is close to the heart of its president, Sir Peter Large, whom noble Lords will know instigated the CORAD Report, in which anti-discrimination legislation was first advocated. I am greatly indebted to him for his thoughts on this matter, which have informed much of the speech I give tonight.
	Whether and how Clause 7 will affect physical access to aircraft and ships not presently covered in the Act remains to be seen, but I hope that the possible difficulties here will not preclude goods and services on accessible transport vehicles being made subject to the Act.
	I must confess that there are certain measures in the Bill the full ramifications of which I cannot yet assess. I look forward to further enlightenment on those issues during the course of our discussions on the relevant clauses.
	I should like to flag up two areas of uncertainty in the 1995 Act which I hope will be clarified during the passage of the Bill or taken note of in good time before they become significantly important in October 2004. I do not think that either will require primary legislation; both can probably be remedied in regulations.
	The first concerns uncertainty about the application of the Act. What exactly is meant by "facilities"? Do they include, for example, bridges, roads, on-street and off-street parking, children's playgrounds, village greens, nature reserves and nature trails? Further clarification and specific examples of what is and is not a facility would be extremely useful. As president of the Disabled Ramblers—although I must say that I have never been a rambler myself—I know that this is a point of great interest to the members of that association. Issues such as the accessibility of footbridges over rivers, towpaths and so forth have created huge problems. If some or all of these examples are deemed not to constitute facilities, there will be ample scope for making the lives of disabled people more difficult, narrower and less enjoyable than they need to be.
	The second area of uncertainty is when the greater expense or additional cost of making reasonable adjustments can or cannot be passed on to a disabled customer. When an accessible taxi is available, is it permissible to charge a disabled passenger something extra, as I have been told has happened? Other possible examples include adaptations to a powered wheelchair to enable it to be controlled by a particular disabled person; ticket surcharges levied to pay for the hire of helpers to enable disabled people to attend or take part in New Year's Eve celebrations at an hotel; loading disabled people who cannot walk into aircraft seats; hiring a BSL interpreter to allow a deaf person to hear a paid lecturer at a function in a village hall; and a woman with cerebral palsy being charged more at a hairdressing salon because of her uncontrolled head movements. Those examples should show which of the additional charges are legitimate and which are not.
	This is a hugely welcome Bill. No doubt some will argue that one or two of the clauses do not go far enough. Others will point out that there are still areas of discrimination that are excluded. No doubt others will think that we have done enough to eliminate discrimination and that some or other element, or even the entire Bill, goes too far and is yet another unwelcome addition to legislation governing people's rights. Perhaps those people should read what was said by the noble Lord, Lord Swinfen, in his speech. I hope that we will be able to make progress and will improve the Bill during its passage through this House, in particular with regard to mental health.
	To those people who say that we have gone too far and to those who say that we should not pass the Bill because it will not plug all the gaps, I would point out, as did the noble Lord, Lord Ashley, that several of its clauses fill holes in the existing legislation that were exposed and well delineated during debates held in 1995 when the original legislation was being considered in this House. I very much hope that those acknowledged gaps will not be allowed to persist merely because this amendment Bill omits some desirable extension to the DDA or because someone might consider that one or other measure goes too far to be contemplated at this time.
	I wish the Bill a safe and speedy passage and that it will receive the Government's blessing. Better still, as suggested by the noble Lord, Lord Ashley, perhaps the Government will come forward with a Bill of their own.

Lord Bragg: My Lords, I thank my noble friend Lord Ashley for bringing the Second Reading of this Bill to your Lordships' House. Over the past months we have heard many reasons for the continuation of this House. Some have been to do with the number of amendments considered—I believe that well over 4,000 were considered and sent back to the other place, where most of them were adopted—while others have to do with the independent voices and deeply informed experience which make the opinions and the cases of some noble Lords heard in this place. I would suggest that none has been more successful and more important than that of my noble friend Lord Ashley in the area of disability.
	I have known my noble friend since the 1960s when we worked together at the BBC Lime Grove studios. I admired him then as a television producer. I admire him even more now, if that is possible, as a fighting Member of your Lordships' House.
	I hope that the House will excuse me for a moment while I clean my contact lens which is disabling me from reading my speech. It is ironic and rather trivial, but I shall have to see to it. That is better.
	Tonight marks the first occasion on which I have had the opportunity to make such remarks about my noble friend. I could not let it pass by.
	I should also like to point out that I, like many others concerned in the general area of disability, welcome the Bill. I welcome also all that the Government have done so far. There are shortcomings. Those shortcomings are seized on by the usual standing army of the Government's critics and, rightly, they are being addressed here tonight. However, I would suggest that disability is one of several areas in which the Government are now making steady, if unspectacular—certainly unsung—but definite progress. The Bill marks a fundamental and important step forward and I support it, but in one area, at least, it is not yet enough. More steps are needed.
	I speak as the president of MIND. I have been associated with MIND for over 15 years and now have the privilege to serve as its president. Nevertheless, I hope that the House will be assured that I also speak, as do all noble Lords, independently on this issue. Others have covered many and different areas of disability, but I shall concentrate on mental illness, mental ill health and, in this context, mental disability, as did my noble friend Lady Wilkins in her excellent speech, and the noble Baroness, Lady Darcy de Knayth. Inevitably there will be some overlap—something which is not entirely unusual in your Lordships' House.
	The ambition to work is widespread among people who use mental health services, yet exclusion from employment is very extensive for this group. The employment rate for people with mental illness is 19 per cent, compared with 47 per cent for all disabled people, and is the lowest for any disability group. In one survey, over one-quarter of employers said that they would never or only occasionally employ someone who had had mental illness in the past. That rose to almost half for people with current mental illness. Yet it is estimated that up to 40 per cent of people with a psychiatric disability are well capable of holding down a job.
	Strengthening the Disability Discrimination Act to combat discrimination against people with mental health problems who wish to enter the workforce or who are dismissed from employment is a vital reform. The Bill addresses this issue and we at MIND welcome that.
	While we support the Bill, we should like it to be amended in terms of the definition of "disability" to provide greater protection for people with mental health problems. By amending the list of "normal day-to-day activities" in Schedule 1, by amending the definition of "long term" and by deleting the requirement that mental health illnesses be "clinically well-recognised", this aim would be achieved.
	A comparative survey of the 11 countries whose disability discrimination laws contain a detailed definition of "disability" shows that the UK DDA is the most disadvantageous for people with mental health problems. The Irish and Australian federal law, for instance, specify,
	"a condition, illness or disease which affects a person's thought process, perception of reality, emotions or judgement or which results in disturbed behaviour".
	The Americans with Disabilities Act 1990, upon which the UK Act is based, has been amplified in regulations and guidance to ensure full coverage of people with mental health problems.
	The Disability Rights Task Force report made several recommendations on this issue. The Government's response was, I am afraid, very disappointing. They recommended that the Disability Rights Commission should keep these issues under review as part of its general monitoring of the operation of the Act. None of the task force recommendations appear in the proposed Bill. I suggest that this should be thought through again and that a truer measure of need be put in the Bill.
	There are three main problems with the current definitions. First, the long term. The "mental impairment" must have a long-term adverse effect on normal day-to-day activities. "Long term" is defined in Schedule 1 to the Act to be a period of at least 12 months, or likely to last for 12 months. This is particularly problematic for a person who suffers a period of depression, or who suffers from post traumatic stress disorder, which may last for only six months or less but be sufficiently severe to require sickness leave or hospital treatment. It is estimated that 20 per cent of people who have a first episode of manic depression do not get another. These people would therefore not be covered by the provision in the definition for recurrent conditions. Several of the cases found by the DRC to have been rejected in employment tribunals concerned people with severe depression lasting up to six months only.
	The second problem concerns the list of "normal day-to-day activities". The effects of mental health problems do not fit readily into the categories listed as "normal day-to-day activities", and some effects not at all. The problem is also compounded by the fact that the substantial effect must be to one of the activities, not spread across them with a cumulatively substantial adverse effect.
	Finally, I turn to the point of clinically well-recognised mental illness. This requirement sets an extra condition for people suffering from mental illness who wish to rely on the Act. That is very unfair. It is problematic because medical definitions and diagnoses of mental illnesses are both uncertain and controversial. To have a different rule for physical and for mental conditions is itself discriminatory and out of place on the face of the Disability Discrimination Act. However, there is very little evidence to suggest that this is causing problems in practice.
	Let me take depression as an example. People who have a depressive condition may exhibit a variety of symptoms—disruption to normal sleep patterns, a withdrawal from social life, difficulty in going out of the house, agoraphobic symptoms, intermittent panic attacks and a persistent pattern of self-harming or attempting suicide may all be characteristic of a diagnosis of depression. None of these distressing symptoms is satisfactorily encapsulated in "normal day-to-day activities". It is difficult to estimate accurately how many people are denied protection by the Act because of the deficiency in the definition, but people with a diagnosis of depression are the group most likely to find problems.
	The ONS 2000 report, Psychiatric Morbidity Among Adults, found that at any one time in Great Britain, of people aged between 16 and 64, one in six suffer from mental distress. Of these, 9.2 per cent have mixed anxiety and depression; 4.7 per cent generalised anxiety disorder; 2.8 per cent a depressive episode; 1.9 per cent phobia; 1.2 per cent obsessive compulsive disorder; and 0.7 per cent panic disorder.
	One in five people in our country will be affected by depression, and one in 100 people will experience manic depression at some point in their life. More than 2.9 million people in the UK are diagnosed as having depression at any one time—that is, at this moment in time, now. There are 30 working days lost due to depression and anxiety for every single day lost to industrial disputes. About one in six people who experience severe depression eventually commit suicide. Seventy per cent of recorded suicides are by people who have experienced some form of depression. On average it takes 10 years for someone to receive an accurate diagnosis of bipolar affective disorder, which is manic depression. One in five people who are not accurately diagnosed go on to commit suicide.
	I said at the beginning of my remarks that I spoke as president of MIND, as indeed I do. I also speak as someone who has had two unhappy experiences of depression. I have some experience then of the blight that this can bring to people's lives. It is, in every sense and by any comparison, disabling.
	Although we are undoubtedly making progress, it is still true that mental illnesses are simply not regarded as equal to physical illnesses, although they can be just as disabling if not more disabling. You pull a muscle or damage a disc in your back and everyone sympathises. You suffer from a depression which fells you equally and people are nervous and shy away. Obviously I generalise. The mood is changing and many people in our society are becoming much more tolerant and understanding. These people include the Government, I think. Once again, I welcome the Bill, but I hope and trust that in the area of mental distress they will take up the suggestions made here, by MIND and by other associations and go further. Like my noble friend Lord Ashley, I commend the Bill to the House and hope for the speedy passage of a strengthened version through your Lordships' House.

Baroness Masham of Ilton: My Lords, I shall speak exceedingly briefly, but I want to give my support to the noble Lord, Lord Ashley of Stoke, and to most parts of his Bill.
	I spent today chairing the Winston Churchill Fellowship in the category of "Long term medical conditions". The Bill follows well the debate on the National Institute for Clinical Excellence. One of the applicants we interviewed today was a professor with multiple sclerosis. I asked him if he had tried beta interferon. "No", he sadly said. Postcode prescribing discriminates. For severely disabled people who might have their quality of life improved, it is a tragedy that drugs which can help so many people with complicated disabling conditions are not available. I hope that the drugs will become cheaper and available to all those who need them.
	It is not surprising that this Disability Discrimination (Amendment) Bill is now before us. Disability is very complex and very varied, as the noble Lord, Lord Bragg, said. People have many different needs, but discrimination must be eliminated wherever possible. The Bill aims to fill some of the gaps in previous legislation.
	I welcome the extension of the DDA protection to those with cancer and HIV. There have been problems and serious cases of discrimination when people have been diagnosed with HIV. The registered blind and partially sighted people should be included, as stated by the noble Baroness, Lady Wilkins, in her excellent speech.
	I welcome the removal of employment exemptions in regard to police officers, fire fighters, prison officers and the Armed Forces under the DDA. I hope that suitable employment can be found for people who wish to work in their chosen profession. But a realistic and safe framework should be found; they must never put fellow workers at risk because of their disability.
	I have some reservations about the proposals relating to small employers—some of whom are having great difficulty surviving as it is. I hope that the Minister will comment on this point.
	Helpful information should be available to all those who want to improve the many facilities and needs of disabled people. I have heard from many who would like to help but who do not know where to obtain information. Could the Minister ensure that local authorities do more to make information available to all those who need it? That would be helpful.

Lord Clement-Jones: My Lords, I am speaking in the gap because, when the list of speakers was drawn up, I was not sure that I should be able to be present. I strongly support the Bill. It will have a beneficial effect on many of those who are not covered by the current terms of the DDA. In particular, as a member of the All Party Parliamentary Group on AIDS, I welcome the extension of the Act to cover people with HIV from the point of diagnosis rather than onset of symptoms. HIV/AIDS organisations have long wanted such a provision. There is no doubt that discrimination in such cases begins at diagnosis rather than at the point of actual ill health. As a trustee of Cancer Backup, I very much welcome the provisions relating to cancer patients, as I do those abolishing some of the exemptions under current legislation.
	Secondly, I very much hope that the noble Lord, Lord Ashley of Stoke—whom we all hold in high regard—will consider certain amendments to the Bill; for example, those so ably dealt with by the noble Baroness, Lady Wilkins, and the noble Lord, Lord Bragg. Mental illness may soon overtake physical illness as a disabling condition in this country. There are currently some 650,000 people with a diagnosed severe mental illness. At any one time, the vast majority are economically inactive. Yet most of them want to work—and work could contribute greatly to their well-being. A survey conducted by the Mental Health Foundation in 2000 demonstrated the extent of the discrimination that such people face in finding employment.
	As has been made clear, the current Disability Discrimination Act does not deal with the matter satisfactorily. I shall not repeat the points made by the noble Baroness, Lady Wilkins, or those so ably made by the noble Lord, Lord Bragg, in relation to the wording of the Act; for example, in terms of mental illness being a clinically well recognised mental impairment which has,
	"a substantial adverse effect on a person's ability to carry out normal day-to-day activities",
	the actual list of "normal day-to-day activities", and so on. In reality, these tilt the balance against those with mental health problems. The Act is inadequate to deal with mental illness. It is often difficult for those with conditions such as depression to bring themselves within the terms of the DDA. The Act desperately needs amendment in that respect, as both the National Schizophrenia Fellowship and MIND have pointed out. The result is that the DRC has found that the definitions within the Act clearly cause major difficulties for those with mental health problems.
	There are issues relating to the blind and the partially sighted, who have also experienced problems in establishing that they are covered by the present legislation. I hope that the noble Lord, Lord Ashley, will take on board some of the suggested amendments during the forthcoming stages of the Bill. Apart from that, we strongly support the provisions of the Bill as it stands.

Lord Addington: My Lords, most of the "usual suspects" are present for this debate, with one newcomer, but not all of them. It seems odd not to hear the views of the noble Lords, Lord Campbell of Croy and Lord Morris of Manchester. However, I am sure that they will soon join this particular fray. The noble Baroness seems to be slightly ambiguous about the prospect.

Baroness Hollis of Heigham: Not at all.

Lord Addington: My Lords, it is also good to see the noble Baroness in her place on the Government Front Bench. In the past she has been on the other side of the Chamber when we have debated these matters. I remember her being on my side in certain Divisions during the passage of the original Bill. Unfortunately, when people move across to the other side of the Chamber, one suddenly finds the brakes of government being applied. Perhaps this happens to all of us, and one day perhaps I shall find out. However, we have not moved as fast as we had hoped.
	The 1995 Act was never seen by most of those involved as an end to the argument; it was merely a starting point. It was not happy in its inception—it was effectively dragged from the then government as a result of pressure from both outside and inside Parliament. As a result, the Act has a series of glaring holes.
	The exemption for small firms is one that I particularly remember. I have never felt that having one more employee provides the grounds for not discriminating, when one less means that discrimination is possible. That is simply not right. There is something basically flawed about it. The series of exemptions in the Act does not make sense.
	The defence of reasonableness runs through the 1995 Act. It states that if a person cannot do the job, he or she does not have to be employed. That is how I have always interpreted it. Then surely that relates to the Armed Forces exemption, referred to by the noble Lord, Lord Swinfen. Surely it is the case that if a disabled person cannot fulfil the basic criteria, the person should not be included. If, as a result of future technical developments, disabled servicemen and women can do their jobs satisfactorily, their entry to the services should be accepted.
	Perhaps I may refer briefly to the disability that I know best. How many dyslexic infantrymen have there been in the Army? We do not know. There have always been such groups in the service. Let us not pretend that the barrier is rock-solid. That has never been the case. It is possible that the Army does not know the extent to which it has included disabled servicemen under the definitions in current legislation. I merely put that as a point of argument to the noble Lord and others who have spoken.
	I have been on a steep learning curve in one area of disability. The noble Lord, Lord Bragg, and the noble Baroness, Lady Wilkins, spoke at considerable length about mental illness, as did my noble friend. When I first heard the suggestion that the Disability Discrimination Act should be extended to cover mental illness, I asked myself whether such a provision belonged in the Act. The Bill extends the Act to cover two new groups. Should we add a third; or should we opt for an amendment to bring all these areas together? We are all familiar with the "list" argument. Should we have a huge list including every possibility, or should we opt for a general definition at the beginning, so as not to miss anyone out?
	I have concluded that a definition at the beginning might be a better way forward; and that a better approach would be to include in disability discrimination legislation the history of illness and its effects. Let us not kid ourselves. There will be other groups who are affected. We must bear that in mind. Having heard many of the arguments, I believe that the noble Lord, Lord Bragg, and the noble Baroness, Lady Wilkins, have put their finger on a major flaw in our anti-discrimination legislation, even if there is a semantic argument as to whether mental illness is a disability. The history of illness means that people can be discriminated against. We could go on arguing the point. However, we are now down to tactics as opposed to principles. Our approach should be: how can we achieve the best objectives?
	I cannot say much more about the rest of the Bill because I shall simply end up agreeing with virtually everybody who has spoken. The muddle of transport at the moment is ridiculous. The possibilities and permutations of a journey on public transport are farcical. It is very black humour, but there you are. The idea that somebody should be refused entry to public transport because they are taking slightly longer to pay a fare is also ridiculous. It is beyond words.
	We have to take a stab at a broader brush approach. The Bill contains sensible proposals on housing. The principle is unarguable.
	I shall try not to repeat everything that has been said. The Bill is another brave attempt at more comprehensive anti-discrimination legislation. I strongly suspect that the noble Lord, Lord Ashley, does not regard it as the final word because the foundations are not what we would have chosen. If the Government do not see sense and accept the Bill, we may have a look at expanding the foundations. As has already been said, this issue is not going to go away. I look forward to the Minister's response.

Lord Astor of Hever: My Lords, I thank the noble Lord, Lord Ashley, for introducing his Private Member's Bill and explaining its objectives so clearly. Disability and disability discrimination are matters that demand and deserve our attention. I welcome this opportunity to consider these important issues.
	The Disability Discrimination Act 1995, which was introduced in the other place by William Hague, who was then the Minister for Social Security and Disabled People, represented the first attempt by a British Government to legislate on the concept of disability discrimination. It was a wide-reaching piece of legislation, which sought to enable all disabled people to engage fully and profitably in society. Despite what the noble Lord, Lord Addington, said, it has been described by the Equal Opportunities Review as,
	"the most important discrimination legislation in a generation"
	and,
	"in some respects, the most radical of our discrimination laws".
	However, on these Benches we accept that the time has come for a more proactive approach to equality for disabled people to make it easier for them to access and enforce their rights. It is becoming apparent that the legislation in its current form has a number of gaps that we must seek to close. For example, the extent to which electoral services, the built environment or highways are covered by the DDA is at present unclear. I note that Clause 8 would ensure that all such service functions were covered, thus sweeping away some of the uncertainty about what is and is not subject to the Act. Inequalities remain real and persistent for disabled people and the law sanctions discrimination in too many areas.
	On these Benches we were pleased to support government legislation establishing the Disability Rights Commission. We believe that the commission has started well by emphasising the importance of example and conciliation as a first resort, but with underpinning legal sanctions for wilful and unacceptable behaviour. However, the Government have been slow to act further on the provision of greater protection for disabled people. The 1997 Labour manifesto contained a commitment to,
	"comprehensive, enforceable civil rights for disabled people".
	In March last year, the Government's response to the recommendations of the Disability Rights Task Force was published. The 2001 Labour manifesto affirmed the Government's commitment to implementing that response. Yet still we await definite action. The Disability Rights Commission has asked the Government to introduce a disability Bill in the 2002 Queen's Speech. If the Government do not back this Bill, they should take heed of the strength and breadth of support for it and introduce their own legislation at the earliest opportunity. As the noble Lord, Lord Ashley, said, it is time to get a move on.
	With the Government apparently giving no indication of when and how they plan to implement the remaining Disability Rights Task Force recommendations, I turn to the Bill. Like the noble Baronesses, Lady Darcy de Knayth and Lady Masham, and the noble Lord, Lord Clement-Jones, I welcome the extension of DDA protection in Clause 1 to those with cancer and HIV. The complexity of the current definition encourages defendants to make spurious challenges to the claimant's status as a disabled person, adding to the length and cost of litigation and deterring disabled people from bringing or continuing cases.
	I am particularly aware of the continuing unhappiness of organisations such as the RNIB, which has found that visually impaired people often have problems establishing that they are covered by the Act, sometimes because they have developed coping mechanisms and sometimes because tribunals have failed to apply guidance correctly.
	Equally, I have received representations from MIND, which is unable to support the Bill fully, as the definition of disability does not include people with mental health problems. The noble Lord, Lord Bragg, spoke eloquently about mental health problems. I look forward to helping to improve the Bill on that important issue in Committee.
	The Bill addresses the immensely important issue of disability and the workplace. Disabled people make up a large and growing proportion of the working age population. Properly implemented internal grievance procedures can help employers to resolve complaints in the workplace, meaning that fewer cases are taken to tribunal, which can be a lengthy and difficult process for everyone concerned. Employers must create work cultures in which discrimination cannot exist. Businesses react better to new legal frameworks when they can appreciate the strong business case for disability-friendly policies.
	However, a recently published survey showed that employers are failing to introduce innovative, multi-disciplinary approaches to managing disability at work. That suggests that disability policies have become static, with few going beyond the basic administrative requirement. Moreover, the poll showed that only 45 per cent of respondents had made use of government funding in that area. Wider awareness of such schemes would mark a big step forward for disabled people—those already in the workplace and those looking to join.
	None the less, like my noble friend Lord Swinfen, I must profess some concern at the provisions laid out in Clauses 4 and 5, in particular the proposal to end the current employment exemptions to bring the Armed Forces within the DDA. I am sorry to disappoint the noble Lord, Lord Ashley, the noble Baronesses, Lady Wilkins and Lady Darcy de Knayth, and the noble Lord, Lord Addington, but on this point I find myself in agreement with the Government. It would not be appropriate at this time to bring the Armed Forces under the remit of the Act. We have arguably the best Armed Forces in the world, and they must have full fighting capability.
	With reference to Clause 7, I find myself turning again to the failure of the present Government. The travel choices for all disabled people should be increased, and easier access to public transport should be made a priority. However, here I sense that the Government have failed to build on the earlier model set down by the DDA. In their 1998 transport White Paper, the Government agreed that,
	"public transport must meet the needs of all".
	However, save for introducing new accessibility regulations for public transport, the Government have been slow to improve transport choices for the disabled. We have been expecting the Government to publish a consultation document on transport for the disabled, but little has been forthcoming. Perhaps the Minister can advise the House when that document might be launched. I quite appreciate that I have not given her notice of the point, but perhaps she can write to me and put a copy of her letter in the Library.
	I move on to the issues highlighted by Clauses 10 to 12. The Bill would apply to duties to make "reasonable adjustments" for the sale and rent of premises. That would be welcome. Basic forms of discrimination, such as guide-dog bans and refusing to communicate simple information, could be challenged more effectively. However, I must express some concern at the extent to which these "reasonable adjustments" could be taken. Under the Bill, a disabled person could request permission to make a physical alteration to the premises and the landlord would not be able to withhold consent unreasonably. My concern is that such provisions could overburden a landlord and the sense of "reasonable" could be applied too subjectively. A scenario could arise in which different pieces of legislation were applying different pressures to a landlord. It might, for example, be ruled illegal for a landlord to refuse to convert a property for a disabled occupant, while it might simultaneously be ruled illegal for him to perform that work under the planning regulations.
	I conclude by saying, as did the noble Lord, Lord Bragg, how much I admire the work of the noble Lord, Lord Ashley, on disability issues. The thrust of his work is both valuable and admirable and he provides an example for us all to follow. It is clear that we still have barriers to overcome in ensuring that all disabled people are able to live in dignity and independence and play their full part in society. I hope that today's debate has gone some way to ensuring that that happens.

Baroness Hollis of Heigham: My Lords, my noble friend Lord Ashley has introduced a Bill that clearly has wide support in the House. Extending and enhancing disabled people's rights is a topic that we debate regularly, and I think that we do it—as many of your Lordships have said—with considerable expertise. As other noble Lords have said, the issue is not one that will go away. I also do not think that, reading today's Hansard, one would be able to tell the party allegiance of any of the speakers in the debate. I think that that shows the bond we have between us.
	For once, as this is a Private Member's Bill, I do not have the customary responsibility of replying to the debate and answering points. However, as even newly ingrained habits die hard, I am happy to have a go at answering just a couple of the wider, more salient points that have been made.
	The noble Baroness, Lady Darcy de Knayth, asked when additional costs can be passed on to customers and gave hairdressers as an example. The costs can be passed on when the differences in treatment can be justified as a specialist bespoke service to an individual disabled person which costs more than the standard service. That is the basic position.
	The noble Baroness also asked about what is meant by "facilities" in Part III, and whether they include footpaths, towpaths and bridges. The term facility is very wide ranging and is generally interpreted generously by the courts. I should expect footpaths, towpaths and bridges to be covered by the Act when they are part of public footpaths.
	The noble Baroness, Lady Masham, asked about local authorities' responsibilities in disseminating information. When information is a service, it will have to be provided in an accessible manner, such as in mail-packs, by local authorities. She also asked about small firms. Small employers will obviously not have to do anything unreasonable, as other noble Lords have commented. However, I am sure that she will be happy to know that, with the DRC, the Government will be helping to provide effective advice and information so that small employers understand the Act and are not burdened by it. We shall use the time before the changes are due to meet just those needs and seek to allay just those worries.

Baroness Darcy de Knayth: My Lords, the Minister said that she expects that bridges and footpaths will be covered by the legislation. Has she said that in a Pepper v. Hart sense? May one apply that interpretation to her comments?

Baroness Hollis of Heigham: My Lords, it may be interpreted more as "Yes, Minister" than as "Yes, Pepper and Hart". However, the guidance that I have been given on the specific point is that they are likely to be covered by the Act when they are part of public footpaths. I cannot say, beyond that, what weight the courts will give to that assertion. It is the courts who will ultimately interpret the word facility, but my understanding is that we expect them to be covered by the word facility.

Baroness Darcy de Knayth: My Lords, there has been a huge amount of trouble over the issue.

Baroness Hollis of Heigham: My Lords, it might be more helpful if the noble Baroness and I followed up the matter in correspondence. If she wishes to write to me more fully on the issue, I shall seek more expert advice than I have been able to receive today. The issue was somewhat thrown at us, and it is one of the very few not precisely addressed by the amendment that my noble friend Lord Ashley makes in his Bill.
	In framing his Bill, my noble friend has—with his usual wily perspicacity—taken elements from the Government's response to the Disability Rights Task Force, Towards Inclusion, and found inspiration from other sources. However, whatever our view of the Bill's content, the Government do not believe that it is the right vehicle at the right time for taking forward legislation to amend the Disability Discrimination Act 1995 or the Disability Rights Commission Act 1999.
	The Government have a positive agenda on civil rights for disabled people, and we have taken action to deliver on our commitments. I shall return to that point. However, before addressing the issue of the Bill itself, I should like to remind the House of some of our achievements and to outline recent progress, to help put discussion in context.
	When we came to government in 1997, our manifesto made it clear that the DDA was neither comprehensive nor easily enforceable. I am delighted to welcome the noble Lord, Lord Astor of Hever, from the then government, to that view. We said that we would put that right and we started to do so very quickly. We established the Disability Rights Task Force within a few months to advise us on what to do and how best to do it. The task force was chaired by the Minister for Disabled People, with members from disability organisations, the business world and the public sector. Many members were disabled people or people with other personal experience of disability.
	Setting up a commission to enforce civil rights was its first task. In March 1998, the task force made recommendations to the Government about what the role and duties of a disability rights commission might be. We then consulted and produced the Disability Rights Commission Act 1999. By April 2000, the Disability Rights Commission was up and running. Since then, as your Lordships may be aware, the commission has established itself as an important source of information and advice for disabled people and also for business and employers.
	In its first 18 months the commission's Helpline has received almost 100,000 calls; its website has received around 400 visits each day and its caseworker service has assisted over 3,000 disabled people who have brought forward complaints of discrimination. It has also established a conciliation service for disputes arising under the goods and services provisions of the DDA and has provided legal representation in nearly 80 cases. I am sure that noble Lords will agree that that is an excellent start and will want to join me in thanking Bert Massie, the chairman of the commission, and his staff for what they have achieved over this time. It is remarkable and effective.
	The task force then looked at a wide range of complex issues which impacted across all areas of society. It published its final report From Exclusion to Inclusion. Noble Lords may recall that the report made 156 recommendations for change, including some which involved legislation. Prime among those was the need to bring within the scope of the DDA the provision of education to disabled children and adults in schools and in further, higher and adult education.
	We immediately announced our intention to take forward that recommendation. The Special Educational Needs and Disability Act 2001 ensures that, from September this year, disabled children and adults seeking to access education services will be protected against unlawful discrimination and education providers will have to consider making reasonable adjustments.
	Aside from the work of the task force, the setting up of the Disability Rights Commission and the SEN Act, we also committed ourselves to implement the final phase of Part III of the DDA in October 2004. As your Lordships are aware, that will require reasonable adjustments to physical features of premises where access to a service is impossible or unreasonably difficult. The duty will be supported by a revised code of practice, which the DRC has prepared. That was laid before Parliament in November and completed its laying period today. It is a significant document that will help service providers and the courts understand the new and existing access duties.
	I understand that the DRC intends to publish the code towards the end of February. And it is our intention to bring the code into force around the middle of the year. That will ensure that service providers have it well in advance of the new duties coming into force thus enabling them to prepare properly. Indeed, we are encouraging service providers to make adjustments to physical features before the new duties come into force; for example, while they are refurbishing their premises.
	Implementation in 2004 of this final phase of the duties will be a major move forward in improving access to goods and services for disabled people. It will open up to them many more services and bring closer an inclusive society, one in which disabled people can enjoy the services that non-disabled people, such as those of us in this Chamber, often take for granted—simple things like eating out in a restaurant, using the local library, using train services or visiting a cinema or a theatre in due course.
	In preparation for that, we have today launched "Open to Change", the latest in a series of publicity campaigns. These advertisements are aimed at small service providers and encourage them to make minor adjustments to ensure that disabled people can use their services. The campaign invites businesses to contact the Disability Rights Commission Helpline or website for help and advice.
	Towards Inclusion was our response to the task force's final report. It outlined the progress we had made on issues of importance to disabled people and explained our position on all the task force recommendations. Although we are well forward on considering responses to the proposals in Towards Inclusion, we now have to do so in the light of what is needed to implement the employment directive brought forward under Article 13 of the EC Act.
	That directive provides a common framework of protection against unfair discrimination in employment, vocational guidance and vocational training across Europe. It covers discrimination on grounds of age, disability, sexual orientation and religion or belief. This Government played an active part in its negotiation and adoption in November 2000. The Government are currently consulting on the implementation of this directive and also a directive on race equality. That consultation—in a document called Towards Equality and Diversity—does not end until 31st March.
	During negotiations we ensured that the employment directive takes an approach to tackling discrimination—both direct and indirect—against disabled people which allows us to continue with the main, familiar elements of the DDA using the concept of reasonable adjustment, while underpinning our commitment to bringing into coverage a range of currently excluded employment and occupations. The consultation looks at options for amending the DDA in the few instances where it is possible that reasonable adjustments may not be the better approach; that is, in relation to performance pay schemes, occupational pension arrangements, group insurance schemes and bodies which control entries to professions or trade generally known as qualifying bodies. In each case we are consulting on whether the interests of disabled people and the sectors concerned will be best served by adopting an approach to indirect discrimination which involves objective justification or one which relies on making reasonable adjustments.
	We will also be making improvements to the DDA which did not form part of Towards Inclusion. For example, we will be specifically outlawing harassment and including provisions on the burden of proof so that, once a disabled person can show a prima facie case that discrimination has taken place, it will be for the respondent to show that their actions were not discriminatory.
	We have to decide exactly how to reflect the directive when we amend the DDA, and what implications that might have for other things we may wish to do to improve the Act. We believe that the right approach is to look strategically at how all that impacts on the DDA and then to take forward appropriate legislative changes for securing effective civil rights in this area. That clearly has implications for proposals which are in Towards Inclusion, not least because, in a number of respects, we will be going further than envisaged even by the task force.
	We have an opportunity to ensure that, as we seek to implement the directive's requirements across a wide range of areas, we do so in a coherent way which takes account of our other plans. What we have proposed in the Article 13 consultation document is to implement the directive's disability provisions in October 2004, two years ahead of the requirement in the directive. I am sure that this House welcomes that commitment. It means that the provisions will be implemented at the same time as we will be introducing the final part of the DDA's rights of access to goods, facilities and services.
	Noble Lords will be well aware that we are committed to ending the exemption of small employers at that time. However, the directive means that we will also be covering business partners, barristers, advocates and their pupils, the police, prison officers, fire fighters, qualifying bodies and others. All told, these changes mean that we will be covering around 7 million new jobs in which disabled people could work, including around 600,000 in which they currently do.
	As your Lordships will see, we have a very important package of changes due to be implemented in October 2004 which will make a meaningful difference to disabled people's lives. If we can add to those, we will do so. But now is not a time when I can outline every detail of the Government's overall strategy.
	That brings me to the substance of my noble friend's Bill. It is difficult for me to comment on the proposals in the Bill when I am not in a position to confirm the Government's own strategy in every detail. I cannot, therefore, be drawn into addressing our intentions for each and every proposal that we have made, or which my noble friend has made, or which your Lordships have indicated tonight they may go on to make to my noble friend's Bill. However, I can make some comments which I hope will help the House.
	Before I do that, I want to challenge the assertions that have been somewhat unfairly bandied around the House tonight that the Government are failing to advance comprehensive and enforceable civil rights for disabled people. I repeat, since 1997 we have introduced the Disability Rights Commission, education has been brought into the scope of DDA by the Special Educational Needs and Disability Act 2001, and we propose to implement Article 13 of the directive two years ahead of when we might otherwise need to.
	Perhaps I can make some further points. First, I wish to emphasise the extensive changes coming forward in October 2004, not only covering all small employers and bringing them within the framework of the DDA, and extending it to cover important occupations such as the police, but also the bringing forward of the final, full rights of physical access to premises for disabled customers.
	Secondly, we will not legislate while we are consulting on the employment directive. Copies of the consultation document have been sent to over 6,000 people and organisations, including many disability organisations. The consultation does not end until March and we shall need to consider the responses thereafter. That takes time.
	Thirdly, Ministers in the Department for Transport, Local Government and the Regions will shortly undertake their major consultation exercise on extending the scope of DDA to cover transport. They will consult widely with transport providers and disability organisations. My colleagues there would not intend to legislate until that consultation is over.
	Finally, we have made absolutely clear—this was a point made both by the noble Lords, Lord Swinfen and Lord Astor, both of whom I believe have experience in this field—that there are some things we simply will not do. Extending the DDA to the armed services is one such. It is not a question of consultation or discussion but of our concept of good and responsible government.
	My noble friend's proposals in the Bill are affected by all four of the qualifications I have just outlined. It cannot therefore be right for us to seek to legislate in this way. Some of my noble friend's proposals flow from the Employment Directive, one involves the transport proposal on which the Government are consulting in a different department and yet another seeks to bring the Armed Forces within the scope of Part II of the DDA, which we have said we shall not do. As I said earlier, I shall not enter into a process of testing all the clauses in the Bill to see whether we agree with them now or may agree with them in the future or with some modified version of them. But I shall say this: if we did, there are difficulties with them which would require significant work to overcome.
	It is not a one issue Bill that my noble friend has introduced, despite his seductive style. This is not a one issue Bill with simple provisions. These are complex issues and the Bill seeks to amend rightly a complex Act. It affects the Human Rights Act, the Police Act and employment tribunals. It has implications for Northern Ireland, education and transport provisions and the consultation that may be required with every government body, every government agency, every local authority and every public and private transport body, to say nothing of the regulation that would necessarily follow. I do not want to add to the complexities but your Lordships will understand that one does not address a problem by a simple piece of legislation. It has to be preceded by elaborate consultation across government and elaborate consultation with all the appropriate affected bodies. It has then to be extended to Northern Ireland, Scotland and the like. It also has to be followed up with workable regulations.
	Inevitably, my noble friend's Bill confronts the problems that face all Private Members' Bills. Legislation has to be carefully thought through before it can be advanced. Taking forward my noble friend's Bill would result in piecemeal legislation which would have to be amended again when we took forward other of our proposals. That would be a strategy guaranteed to confuse those affected, I suspect, and certainly might bring down the wrath of some employer organisations which would be in the interests of no one, including disabled people.
	In conclusion, it is customary to congratulate a noble Lord on introducing a Private Member's Bill where the Government believe that the Bill reflects their own policies and priorities. Therefore, I congratulate my noble friend on introducing his Bill and on his wily and shrewd attempt to draw out from us plans that we are not yet ready to produce. Therefore, I cannot offer the Government's wholehearted support.
	We remain committed to pursuing an agenda that will produce effective change for disabled people. There can be no doubt that the changes we have introduced since 1997 have been widely welcomed and, in this context, the major stepping stones of the establishment of the DRC and the enactment of the Special Educational Needs and Disability Act stand out. What we do next to amend the DDA will represent a further significant step forward and we must therefore ensure that it is a fully correct step. We are building on what we have done. We shall legislate when there is an opportunity to do so, and once we have taken account of all the factors involved in producing an effective legal framework.
	We shall introduce significant and coherent improvements for disabled people in October 2004. And we shall continue to respect, and respond to, the desire of disabled people to lead independent lives as equal members of society. However, the Government cannot support my noble friend's Bill today as the appropriate, best and most suitable way forward.

Lord Ashley of Stoke: My Lords, some sections of the press are quick to report odd debates in this House such as the discussion yesterday at Question Time on whether House of Lords Christmas cards were the correct size. The press reports that kind of debate in order to mock this House. However, if the press covers this debate, the public will gain a very different impression of what this House does. It really has been a superb debate and one of which I believe we can be proud indeed. The speakers have been eloquent, well informed, human and thoughtful and, indeed, if I may say so, thought provoking.
	I am grateful to all noble Lords who have taken part in the debate which has constituted a wonderful discussion. I hope that it will be widely read by people interested in this subject. The few examples that we have heard of people suffering discrimination could be multiplied a millionfold. Enormous discrimination is taking place now in Britain, and we should be ashamed to allow any of it. Our legislation should be so comprehensive and so enforceable that such discrimination is not possible. This is supposed to be a civilised country but we allow that discrimination to go on and on and on. The fact is that discrimination equals suffering. It is our job to try to stop that suffering as best we can.
	Before I address the speech of my noble friend the Minister, I wish to refer to some criticism from Members of the Back Benches. I fully appreciate concerns as regards the Army. However, all I would say is that the Army is a massive industry. It is, indeed, the best Army in the world, as the Minister said. It is a massive industry. Thousands of men do not go to the battlefront and into the trenches as in the 1914-18 war. The tail of the Army is enormous, as with any army. There are few personnel fighting at the front. Many personnel are involved in administration.

Lord Swinfen: My Lords, I am grateful to the noble Lord for giving way. We are not in a situation of fighting a 1914-18 war with static trench warfare. Warfare today is incredibly fluid. It does not matter where you are in the battle line; you are in the frontline far back in the tail. Every serviceman must be a soldier first, even if his job is that of a butcher. He must be capable of fighting wherever he is. If people are not capable of fighting, they endanger the lives of those around them.

Lord Ashley of Stoke: My Lords, the noble Lord is confusing two things. I am afraid that he is right to say that the Army today is complex, but he is wrong to assume that every person in the Army has to be able to fight. The fact is that with today's Army, battles do not go on at the front in the same way. However, I do not want to belabour the point at this stage.
	It has been said that some Members of this House do not like the inclusion of the Army. We should discuss that in Committee, when I should be more than glad to discuss the details. It has also been suggested that those who are mentally ill, blind people and those with learning difficulties may be excluded. There is absolutely no intention on my part to exclude anyone. I assure those noble Lords who spoke so eloquently that we shall of course include such people. The right time for noble Lords to move amendments is in Committee. I am sure that the Minister will welcome, as I will, the many amendments that will be tabled—the Bill will have a good long session. I say to noble Lords, "Please table amendments"; I shall welcome them and be very glad to accommodate them.
	The Minister gave the clear impression to the House that all is fine and lovely, that the Government are racing ahead making massive advances and that the Bill is so complex and piecemeal that it would be disastrous to pursue it. Did you ever hear such a story in your life? It is unbelievable that any Minister can get things so wrong. In terms of what the Government have done, no one in this House, including my noble friend, has paid more tribute to the Government for what they have done for disabled people than I have. Time and again—this appears in Hansard—I have said how splendid this is or that is.
	I am sick of paying tributes, I have made so many. People think that I am trying to ingratiate myself with the Government, but I am not. There is no point in my noble friend coming out with the usual refrain that they have introduced the commission and special educational needs, and so on. We have already accepted that and paid tribute to the Government for doing so. Fine. Let us now discuss the Bill and the shortcomings in existing legislation.
	The fact is that for all that the Government have done—which I repeat is admirable and splendid—thousands of people suffer discrimination, and it is our job to stop that. I have not said that no advances have been made, as my noble friend implied; I have said that advances have been made, but that they have not been made quickly enough. They should be realised far more speedily. All noble Lords apart from my noble friend agree on that. There have been some variations, difficulties and objections, but by and large that is the view of the House. The Government will isolate themselves if they reject the Bill as calculatedly and as dogmatically as the Minister seemed to be doing.
	I do not want to go on at length because—I say this again—I have a high regard for what the Government have done. No one has spoken more vehemently than I have about how wonderful what they have done is. However, when it comes to advances, the Bill is a glorious—a golden—opportunity for the Government to move forward in a substantial way. Far from the Bill being piecemeal, the fact is that existing legislation is piecemeal. The Bill provides the Government with a comprehensive and enforceable package. That is what disabled people want.
	Finally, it is almost time to get the placards out. I inform the Minister that we have a million tucked away in large buildings throughout Britain. If the Minister insists on saying no to the Bill, it would be time to get them out again. We could discuss that over a glass of beer. I am sure that we can reach some accommodation. I only hope that my noble friend—or another Government Minister—will meet us in Committee to discuss the amendments that will be tabled. We want some kind of reasoned advance from the Government. They have done that so far. Let us hope that they can do so in future. I commend the Bill to the House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at fourteen minutes past nine o'clock.